Milk Price War?

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#595212 14-Mar-2012 17:25

Nosh being in only 3 places around Auckland would seem to limit their overall competitive advantage for the $1/L milk.

As it is, Nosh is mostly in the central Auckland region, and not down south where they probably could see a bigger impact for milk sales, though possibly not for standard grocery items. Nosh does have a perceived image as being slightly more upmarket than the standard supermarket chain.

If there were more Nosh stores, then we would probably see a different result.

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#595223 14-Mar-2012 17:52

BlueShift: I know at least one nationwide pizza chain doesn't get their cheese from Fonterra, instead its imported from California. That its cheaper for them to import a dairy product to NZ tells you something.

Is cost really the sole deciding factor for that one?

Franchise agreements and making consistent product internationally are usually behind those decisions. U.S chains will be using a highly processed commercial pizza cheese, cheaper than a genuine mozzarella blend.

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#595242 14-Mar-2012 18:48

SepticSceptic: Nosh being in only 3 places around Auckland would seem to limit their overall competitive advantage for the $1/L milk.

As it is, Nosh is mostly in the central Auckland region, and not down south where they probably could see a bigger impact for milk sales, though possibly not for standard grocery items. Nosh does have a perceived image as being slightly more upmarket than the standard supermarket chain.

If there were more Nosh stores, then we would probably see a different result.

If there were more Nosh stores I doubt they wouldn't be selling milk at the price they are.

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#595249 14-Mar-2012 19:08

networkn: Nosh are doing this $1 per litre milk promotion which is excellent, and when it was announced, it seemed inevitable that a price war would break out with Supermarkets leading the way! Problem is nothing really has worked and no-one except Nosh has dropped their prices to that level.

With a $25 minimum spend on other goods at a niche food market - that may take some time to happen.

Nosh is buying new customers, retaining the kind of customers they are looking for, and getting volume expansion for other lines.

Most of their Auckland locations are competing with nearby New World and Countdown locations.

networkn: I am wondering how to apply pressure to supermarkets to get them to drop prices as well, surely in the quantities they are talking about it wouldn't be out of reach to get pretty close to Nosh (Who is taking a loss on every litre if you believe them). I have it on reasonable authority they had a record month regardless.

How does one apply pressure in these situations?

An ever growing bunch of mums with kids and placards standing around in the supermarket forecourt all day + tv cameras will make quick work of it.

alexx

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#595269 14-Mar-2012 19:49

mattwnz:

Loss leaders can come out of the marketing budget.

The fact that this thread got started and people on here (myself included) will have done a search for Nosh, means that marketing budget has been well spent.

Limit 2 x 2L bottles per customer @ $1.99 each.

If the price was sustainable, there'd be no need for a limit. Just like when Nosh have wine tasting, that doesn't mean all stores can offer wine for free.

#include <standard.disclaimer>

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#595271 14-Mar-2012 19:54

alexx:
mattwnz:

Loss leaders can come out of the marketing budget.

The fact that this thread got started and people on here (myself included) will have done a search for Nosh, means that marketing budget has been well spent.

]

only if you and other people end up buying stuff from nosh.

marketing that spreads awareness but results in no extra sales is not money well spent.

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#595298 14-Mar-2012 20:42

Ragnor: /devils advocate

No one complains about the price of orange juice if it's expensive they simply buy something else, why is milk
different?

If milk is expensive simply don't buy it, humans do not need cow's milk and the nutritional benefits are over-hyped.

Eat more green leafy veg for calcium, better source than milk anyway.

Hear, hear

networkn

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#595307 14-Mar-2012 21:00

Ragnor: /devils advocate

No one complains about the price of orange juice if it's expensive they simply buy something else, why is milk
different?

If milk is expensive simply don't buy it, humans do not need cow's milk and the nutritional benefits are over-hyped.

Eat more green leafy veg for calcium, better source than milk anyway.

Tea and breakfast cereal is not nice if you exchange leafy veg for milk! Milkshakes and the like I imagine, would tasty downright nasty and have a horrible consistency!

rhy7s

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#595318 14-Mar-2012 21:11

networkn:
Ragnor: /devils advocate

No one complains about the price of orange juice if it's expensive they simply buy something else, why is milk
different?

If milk is expensive simply don't buy it, humans do not need cow's milk and the nutritional benefits are over-hyped.

Eat more green leafy veg for calcium, better source than milk anyway.

Tea and breakfast cereal is not nice if you exchange leafy veg for milk! Milkshakes and the like I imagine, would tasty downright nasty and have a horrible consistency!

Try out other 'milks', e.g. haven't checked these links out but a few ideas on a page from a quick google: http://iskra.tripod.com/nomilk/altmilk.htm, lots of scope for experiment (rice and oat milk are very easy). Also, a green smoothie certainly isn't nasty.

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#595417 15-Mar-2012 00:02

Here in Oz, I can walk into any Coles supermarket and get 2L of milk for $2. No limits or restrictions. Lots of competition here and good deals on the basics. Loaf of bread: $1, 1KG of tasty cheese $7 etc etc. I don't shop at Woolworths 'cos it's not close but understand their pricing is similar.

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#595428 15-Mar-2012 02:10

networkn:

Tea and breakfast cereal is not nice if you exchange leafy veg for milk! Milkshakes and the like I imagine, would tasty downright nasty and have a horrible consistency!

Yes but continuing my devil's advocacy..

Lots of people don't have milk in their tea or coffee and there are plenty of other drinks you could have instead of tea.

There are also plenty of other options for breakfast aside from cereal.

If you don't like the price, don't buy milk!

Fonterra published a clear manual of how they determine the farm gate price which eventually determine the retail price.

The only way we can have lower prices for milk in NZ is if there some kind of government subsidisation like overseas, going back to the bad of days of failed economic protectionism is a bad idea.

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#595442 15-Mar-2012 08:11

Here's the answer you're looking for -

"Director Clinton Beuvink said the company didn't think it was right that supermarkets loss-lead unhealthy junk food and soft drinks and then made "fat profits" on a healthy food product such as milk. "For these retailers milk is the proverbial 'cash cow'"." Now he believes it's time for Nosh to think about bottling its own milk and it's looking for a business partner to fund a $2 million pasteurisation plant in Auckland."

http://www.stuff.co.nz/business/farming/6576713/Nosh-in-milk-bottling-bid

scuwp

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#595444 15-Mar-2012 08:22

Consumers have plenty of choice. Even in my local supermarket I can choose between the 'supermarket' brand or a named brand of milk, so I am not sure what all the fuss is about. They both probably come from exactly the same factory however the supermarket brand is significantly cheaper, by around 40%. It always amuses me the customers that grab the 'top shelf' branded products which are right next to the cheaper bottles and then grizzle about the price.

I think I pay around $3:60 for a 2 litre. Certainly not worth my time/petrol to drive 1/2 hour across town to save a couple of bucks at Nosh. Got to watch out for the false economy.

The price of so many basic commodities is exorbitant, never mind milk. A couple of bags of basics rarely comes in under $100 now. Sadly it's cheaper to feed the family at McDonalds.

Lazy is such an ugly word, I prefer to call it selective participation

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#595464 15-Mar-2012 09:05

Ragnor:
Yes but continuing my devil's advocacy..

Lots of people don't have milk in their tea or coffee and there are plenty of other drinks you could have instead of tea.

There are also plenty of other options for breakfast aside from cereal.

If you don't like the price, don't buy milk!

Hell yeah, Coke is much cheaper than milk. Why drink 2l of milk at $3.60-$4.50, when you can get 2.25l of name brand Coke for $2, or cheapo off-brand cola for $1? That's a cheaper caffeine fix than coffee or tea (unless your work supplies the coffee & tea free).
And when you consider that most of the ingredients in cola except the water are imported, you're getting even better value for money compared to milk which comes from cows on grass you can drive for 15 minutes to see.

Even better, why drink cola when tap water is free!

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#595478 15-Mar-2012 09:27

ajobbins: Here in Oz, I can walk into any Coles supermarket and get 2L of milk for $2. No limits or restrictions. Lots of competition here and good deals on the basics. Loaf of bread: $1, 1KG of tasty cheese $7 etc etc. I don't shop at Woolworths 'cos it's not close but understand their pricing is similar.

in general i found coles fresh produce to be much fresher than woolies ... it almost seems as though the near expired food are sold by coles to woolies to put on their shelves

same in NZ comparing new world vs pak n save / countdown (in my experience)

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