18 October 2009

They can "get away with higher prices" - IGA distributor

WA IGA President John Cummings claims that locally owned supermarkets are "highly competitive" according to a survey he "personally conducted", where a basket of products sold at his IGA store in Glengarry were compared with products purchased from Coles and Woolworths stores in the Sydney suburb of Warringah. In his findings, Cummings stated:

The only conclusions to be drawn from this survey is that Perth shoppers are either well served by the independent sector and that the independents continue to put downward pressure on day-to-day grocery prices, or both Coles and Woolworths are engaging in blatant price gouging of consumers in Sydney.

Cummings' personal research is not as definitive as he would like to believe, especially when one looks at one of the slides from a presentation that was given by Reitzer, CEO of Metcash, to US investors:

Reitzer tells investors that one of the reasons that Metcash's "independent" grocers have been successful is that "their location or format allows them to get away with higher prices." Far from having the downward pressure claimed by Cummings, Reitzer boasted that IGA is able to defy market forces and rip off consumers.

1 comment:

Clinton said...

Not only getting away with higher prices, they are getting away with sub standard store presentation and service. Not to mention perpetuating the massive hoax that they are small business. They also refused to be a part of price surveying for the Federal governments grocery watch scheme. I wonder why.