Countdown supermarket scandal

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Aredwood

3885 posts

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#1180501 21-Nov-2014 01:23

The Warehouse got squeezed out due to bot Pak n Save and countdown. Lowering their prices at the stores near to the Warehouse Extra sores (supermarket stores). Consumer magazine surveys at the time proved this. The big 2 just had to wear some losses at their stores that were near to the Warehouse stores. Knowing that it would only be a matter of time until the Warehouse would be forced to exit. Just like the Telecom Vs Saturn example above.

What needs to happen - The govt needs to grow some balls and pass a law stating that companies cannot charge different prices for the same item. Bought from different stores or different areas. With the only exception being direct costs (such as postage). And a law saying that adding a margin onto such costs is also illegal. This will effectively force every retailer to offer the same price model as online shopping websites. Charge the same price to everyone - with the only difference being the cost of delivery.

This will mean someone could then open a single supermarket directly across the road from 1 of the big chains. And either the big chain will have to cut their prices over the whole country. Or they will have to wear the loss of sales from that 1 branch, to the new company. This will allow new companies to easily enter the supermarket industry. Or any other industry that is dominated by a few big companies. And it won't impose any new compliance costs on companies that only have 1 shop / branch.

MikeB4

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#1180512 21-Nov-2014 06:04

Aredwood: The Warehouse got squeezed out due to bot Pak n Save and countdown. Lowering their prices at the stores near to the Warehouse Extra sores (supermarket stores). Consumer magazine surveys at the time proved this. The big 2 just had to wear some losses at their stores that were near to the Warehouse stores. Knowing that it would only be a matter of time until the Warehouse would be forced to exit. Just like the Telecom Vs Saturn example above.

What needs to happen - The govt needs to grow some balls and pass a law stating that companies cannot charge different prices for the same item. Bought from different stores or different areas. With the only exception being direct costs (such as postage). And a law saying that adding a margin onto such costs is also illegal. This will effectively force every retailer to offer the same price model as online shopping websites. Charge the same price to everyone - with the only difference being the cost of delivery.

This will mean someone could then open a single supermarket directly across the road from 1 of the big chains. And either the big chain will have to cut their prices over the whole country. Or they will have to wear the loss of sales from that 1 branch, to the new company. This will allow new companies to easily enter the supermarket industry. Or any other industry that is dominated by a few big companies. And it won't impose any new compliance costs on companies that only have 1 shop / branch.

If the Government wanted to wreck our economy they would do this.This is a crazy idea.

JWR

821 posts

Ultimate Geek

#1180514 21-Nov-2014 06:20

From Countdown..

"20 November 2014: Today the Commerce Commission announced it has closed its investigation into Progressive Enterprises Ltd having found no evidence to support false allegations made under Parliamentary Privilege earlier this year, or in any of the other matters investigated."

'No evidence to support allegations" does not necessarily mean 'false'

MikeB4

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#1180518 21-Nov-2014 06:33

JWR: From Countdown..

"20 November 2014: Today the Commerce Commission announced it has closed its investigation into Progressive Enterprises Ltd having found no evidence to support false allegations made under Parliamentary Privilege earlier this year, or in any of the other matters investigated."

'No evidence to support allegations" does not necessarily mean 'false'

If one tries hard up really means down, and blue is pink.

Aredwood

3885 posts

Uber Geek

#1180861 21-Nov-2014 15:42

KiwiNZ:
Aredwood: The Warehouse got squeezed out due to bot Pak n Save and countdown. Lowering their prices at the stores near to the Warehouse Extra sores (supermarket stores). Consumer magazine surveys at the time proved this. The big 2 just had to wear some losses at their stores that were near to the Warehouse stores. Knowing that it would only be a matter of time until the Warehouse would be forced to exit. Just like the Telecom Vs Saturn example above.

What needs to happen - The govt needs to grow some balls and pass a law stating that companies cannot charge different prices for the same item. Bought from different stores or different areas. With the only exception being direct costs (such as postage). And a law saying that adding a margin onto such costs is also illegal. This will effectively force every retailer to offer the same price model as online shopping websites. Charge the same price to everyone - with the only difference being the cost of delivery.

This will mean someone could then open a single supermarket directly across the road from 1 of the big chains. And either the big chain will have to cut their prices over the whole country. Or they will have to wear the loss of sales from that 1 branch, to the new company. This will allow new companies to easily enter the supermarket industry. Or any other industry that is dominated by a few big companies. And it won't impose any new compliance costs on companies that only have 1 shop / branch.

If the Government wanted to wreck our economy they would do this.This is a crazy idea.

Why would this wreck the economy? Im not saying that the govt can control prices. Only that a company must charge the same price to all customers regardless of which store they shop at. The company will still have complete freedom to decide what price they want to charge. Considering that there are already lots of companies that do this on a voluntary basis. Which have decided that such an approach work well for them.

At the moment. If I were to open a supermarket next door to say a Countdown. They would be able to lower their prices at just that store, so customers will still shop with them instead of shopping at my store. Even if that particular countdown store no longer makes a profit. It wouldn't worry them as they will still be getting large profits from their other stores to make up for it. Knowing that it will only be a matter of time before my store would go bankrupt due to not enough customers. And when my store closes down, they can then increase prices again. Competition has been eliminated. Yet no laws were broken.

And before you say that Im picking on Countdown - Pak n Save and the Mad butcher did exactly the above when an Asian supermarket near my house decided to start offering really good prices on meat and veges.

Inphinity

2780 posts

Uber Geek

#1180878 21-Nov-2014 16:03

Aredwood:
Why would this wreck the economy? Im not saying that the govt can control prices. Only that a company must charge the same price to all customers regardless of which store they shop at. The company will still have complete freedom to decide what price they want to charge. Considering that there are already lots of companies that do this on a voluntary basis. Which have decided that such an approach work well for them.

Why should the government be able to impose this price consistency? How do you restrict what industries it applies to? You will likely either end up with stores in areas where costs are higher, being unprofitable due to having to keep low prices, and thus closing (and laying off staff), or stores in prices where costs are lower having high prices, as the prices will be set to be profitable at the highest-cost location - thus consumers will pay more across the board.

There are so many ways this sort of price consistency enforcement can go wrong.

trig42

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#1180880 21-Nov-2014 16:07

Inphinity:
Aredwood:
Why would this wreck the economy? Im not saying that the govt can control prices. Only that a company must charge the same price to all customers regardless of which store they shop at. The company will still have complete freedom to decide what price they want to charge. Considering that there are already lots of companies that do this on a voluntary basis. Which have decided that such an approach work well for them.

Why should the government be able to impose this price consistency? How do you restrict what industries it applies to? You will likely either end up with stores in areas where costs are higher, being unprofitable due to having to keep low prices, and thus closing (and laying off staff), or stores in prices where costs are lower having high prices, as the prices will be set to be profitable at the highest-cost location - thus consumers will pay more across the board.

There are so many ways this sort of price consistency enforcement can go wrong.

The same policy would likely see the end of 'Opening Specials' 'Fire Sales' and such if all stores in a company had to have the same prices on that day.

And, who would check it/enforce it?

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MikeB4

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#1180935 21-Nov-2014 16:47

Aredwood:
KiwiNZ:
Aredwood: The Warehouse got squeezed out due to bot Pak n Save and countdown. Lowering their prices at the stores near to the Warehouse Extra sores (supermarket stores). Consumer magazine surveys at the time proved this. The big 2 just had to wear some losses at their stores that were near to the Warehouse stores. Knowing that it would only be a matter of time until the Warehouse would be forced to exit. Just like the Telecom Vs Saturn example above.

What needs to happen - The govt needs to grow some balls and pass a law stating that companies cannot charge different prices for the same item. Bought from different stores or different areas. With the only exception being direct costs (such as postage). And a law saying that adding a margin onto such costs is also illegal. This will effectively force every retailer to offer the same price model as online shopping websites. Charge the same price to everyone - with the only difference being the cost of delivery.

This will mean someone could then open a single supermarket directly across the road from 1 of the big chains. And either the big chain will have to cut their prices over the whole country. Or they will have to wear the loss of sales from that 1 branch, to the new company. This will allow new companies to easily enter the supermarket industry. Or any other industry that is dominated by a few big companies. And it won't impose any new compliance costs on companies that only have 1 shop / branch.

If the Government wanted to wreck our economy they would do this.This is a crazy idea.

Why would this wreck the economy? Im not saying that the govt can control prices. Only that a company must charge the same price to all customers regardless of which store they shop at. The company will still have complete freedom to decide what price they want to charge. Considering that there are already lots of companies that do this on a voluntary basis. Which have decided that such an approach work well for them.

At the moment. If I were to open a supermarket next door to say a Countdown. They would be able to lower their prices at just that store, so customers will still shop with them instead of shopping at my store. Even if that particular countdown store no longer makes a profit. It wouldn't worry them as they will still be getting large profits from their other stores to make up for it. Knowing that it will only be a matter of time before my store would go bankrupt due to not enough customers. And when my store closes down, they can then increase prices again. Competition has been eliminated. Yet no laws were broken.

And before you say that Im picking on Countdown - Pak n Save and the Mad butcher did exactly the above when an Asian supermarket near my house decided to start offering really good prices on meat and veges.

If someone wishes to buy pumpkins at a $1.00 and sell them for $0.70c they should be free to do that. They are their pumpkins and it is their money. We saw price intervention and price controls during the 70's and it eventually wrecked our economy.

SepticSceptic

2186 posts

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#1180940 21-Nov-2014 16:58

KiwiNZ:
Aredwood:
KiwiNZ:
Aredwood: The Warehouse got squeezed out due to bot Pak n Save and countdown. Lowering their prices at the stores near to the Warehouse Extra sores (supermarket stores). Consumer magazine surveys at the time proved this. The big 2 just had to wear some losses at their stores that were near to the Warehouse stores. Knowing that it would only be a matter of time until the Warehouse would be forced to exit. Just like the Telecom Vs Saturn example above.

What needs to happen - The govt needs to grow some balls and pass a law stating that companies cannot charge different prices for the same item. Bought from different stores or different areas. With the only exception being direct costs (such as postage). And a law saying that adding a margin onto such costs is also illegal. This will effectively force every retailer to offer the same price model as online shopping websites. Charge the same price to everyone - with the only difference being the cost of delivery.

This will mean someone could then open a single supermarket directly across the road from 1 of the big chains. And either the big chain will have to cut their prices over the whole country. Or they will have to wear the loss of sales from that 1 branch, to the new company. This will allow new companies to easily enter the supermarket industry. Or any other industry that is dominated by a few big companies. And it won't impose any new compliance costs on companies that only have 1 shop / branch.

If the Government wanted to wreck our economy they would do this.This is a crazy idea.

Why would this wreck the economy? Im not saying that the govt can control prices. Only that a company must charge the same price to all customers regardless of which store they shop at. The company will still have complete freedom to decide what price they want to charge. Considering that there are already lots of companies that do this on a voluntary basis. Which have decided that such an approach work well for them.

At the moment. If I were to open a supermarket next door to say a Countdown. They would be able to lower their prices at just that store, so customers will still shop with them instead of shopping at my store. Even if that particular countdown store no longer makes a profit. It wouldn't worry them as they will still be getting large profits from their other stores to make up for it. Knowing that it will only be a matter of time before my store would go bankrupt due to not enough customers. And when my store closes down, they can then increase prices again. Competition has been eliminated. Yet no laws were broken.

And before you say that Im picking on Countdown - Pak n Save and the Mad butcher did exactly the above when an Asian supermarket near my house decided to start offering really good prices on meat and veges.

If someone wishes to buy pumpkins at a $1.00 and sell them for $0.70c they should be free to do that. They are their pumpkins and it is their money. We saw price intervention and price controls during the 70's and it eventually wrecked our economy.

Isn't this what AirNZ did with local routes when competing against the other carriers - price match to little or no, or even loss for those routes, covering the loss from the profitable routes, and when the competition finally closed, or was absorbed, the fares on those routes shot back up again ?

Geektastic

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#1180960 21-Nov-2014 17:41

Sounds like NZ will become a Soviet-era theme park at this rate!!

Man (looking around empty supermarket shelves): I see you have no fish?

Shop assistant: No sir, we have no bread. The shop with no fish is next door.

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