Countdown supermarket scandal

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gzt

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Topic # 140873 23-Feb-2014 11:12

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This quote really got me annoyed:

Ralph Waters of Progressive (Countdown) in the NZ Herald:"New Zealand consumers, and the economy generally, would not have benefited from the deflation in grocery prices over the last several years without us having very robust buying conversations with our suppliers [...]"

Grr. This looks like utter BS marketing. Countdown is not known for lowering prices at the consumer end of things. It is a premium brand focused on delivering a distinctive shopping experience.

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Reply # 992703 23-Feb-2014 11:17

I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Its quite simple really either the suppliers comply or they don't and it is they that keep this type of practice going the supermarkets are only taking advantage of it.

Its not the only industry the contracting industry has been doing this sort of thing as well.

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gzt

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Reply # 992709 23-Feb-2014 11:37

jeffnz: I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Going by what I read I suspect a big part of it is elements of psychological domination introduced into the negotiations. Robust negotiations conducted with mutual respect are one thing, aiming for psychological domination is going to wind some people up and lose you some friends whether you are successful or not.

scuwp

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Reply # 992711 23-Feb-2014 11:39

jeffnz: I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Its quite simple really either the suppliers comply or they don't and it is they that keep this type of practice going the supermarkets are only taking advantage of it.

Its not the only industry the contracting industry has been doing this sort of thing as well.

Yep. All the supermarkets have been doing this for years. Just political points scoring and another media beat up.

Always be yourself, unless you can be Batman, then always be the Batman

gzt

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Reply # 992718 23-Feb-2014 11:49

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If there is any truth to the demands for retrospective payments outside contract terms to ensure a continued supplier relationship I have no idea, but that is the substantial allegation which kicked it all off and which the CC is asking for evidence on. That seems like it is well outside the scope of 'robust negotiations' if proven.

toyonut

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Reply # 992760 23-Feb-2014 13:12

scuwp:
jeffnz: I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Its quite simple really either the suppliers comply or they don't and it is they that keep this type of practice going the supermarkets are only taking advantage of it.

Its not the only industry the contracting industry has been doing this sort of thing as well.

Yep. All the supermarkets have been doing this for years. Just political points scoring and another media beat up.

This is pretty much the way I am seeing this at the moment too. Just Shane Jones grandstanding in the wake of the elections.

Try Vultr using this link and get us both some credit:

http://www.vultr.com/?ref=7033587-3B

Zippity

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Reply # 992767 23-Feb-2014 13:29

And hiding like a coward behind Parliamentary Privilege............................

Save

JWR

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Reply # 992791 23-Feb-2014 14:16

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I have been a long time and generally happy customer of Countdown.

However, there a two things I want to know...

1- Is Countdown blackmailing New Zealand producers by demanding retrospective paybacks?

2- Is Countdown's parent company (Woolworths (Australia)) dropping New Zealand products in a marketing campaign in Australia?

For 1, I am happy to wait for the Commerce Commission results.

However, for 2, I want to know now!

Sources have made claims. NZ media have reported claims, without any investigation as far as I can tell. Countdown (NZ) have denied it all.

What is the truth of it?

I am pro-trade and definitely not anti-Australian.

But, I will happily boycott any anti-New Zealand companies.

gzt

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Reply # 992793 23-Feb-2014 14:16

It is very close after the Taurima thing. But it appears no one was willing to take any specific allegation to the commerce commission by themselves and wanted others involved first. Someone should keep an eye on Shane Jones's donation box coming up to the next election ; ).

JWR

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Reply # 992800 23-Feb-2014 14:19

Zippity: And hiding like a coward behind Parliamentary Privilege............................

Given- Parliamentary Privilege, can be abused.

But, generally, it is a good thing.

Politicians should be allowed to say anything and let the public decide.

mattwnz

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Reply # 992809 23-Feb-2014 14:38

I'm not happy how the guy in the article said that he found NZ anti Australian. This sounds more like the pot calling the kettle black. Ozzie companies do very well in NZ, infact many of the large companies operating in NZ seem to be owned by an ozzie parent, especially I have found in the building and retail sectors. But NZ companies that expand over to Oz seem to do very poorly, many NZ companies have expanded over there have failed or done poorly, and they have very strong buy Ozzie campaigns, which people preferring to support local. Personally I don't have that much of a problem with that either, as I think we should support local.
However NZ made products are being removed from shelves in Supermarkets in Oz, to be replaced with Ozzie ones. Imagine the outcry if NZ stores started doing that here, and removed ozzie made products.

Regarding people saying that many retailers will press the supplier hard. This maybe the case with the large big box retailers, which are following the Walmart principles. . But not the case with smaller ones. There are producers in NZ that refuse to deal with supermarkets here, and just sell to local retailers and farmers markets, otherwise they wouldn't make any money. People do forget though that in order to offer low prices, and also make reasonable profits, someone has to lose out, and it is probably the supplier. As NZ is largely a duopoly, suppliers really have no choice but to suck it up and take the deal. But that is what happens when you buy from the lower priced places.

oxnsox

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Reply # 992824 23-Feb-2014 15:17

Zippity: And hiding like a coward behind Parliamentary Privilege............................

Disagree.
Parliamentary Privilege is the best vehicle for this. I doubt there was any other way it could have been raised without being swept away from the media and forgotten. Raising in Parliament means its kept in a media spotlight long enough to gather it's own momentum.

If it fails so too does Shane Jones, so he has to be as close as he can to the facts in order to benefit.(This still allows him wriggle room for political interpretation of his facts)

And yes some politicians do abuse their Privileges..... lets hope that this is not one of the those instances

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Reply # 992826 23-Feb-2014 15:20

mattwnz: People do forget though that in order to offer low prices, and also make reasonable profits, someone has to lose out, and it is probably the supplier.

The parent company Woolworths (Australia) has been on an aggressive drive to increase profits for several years now. They seem to be doing quite well. Low prices isn't something really associated with Countdown/Woolworths in NZ. It looks to me like they are using the savings to fund expansion in the main.

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Reply # 992844 23-Feb-2014 16:03

scuwp:
jeffnz: I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Its quite simple really either the suppliers comply or they don't and it is they that keep this type of practice going the supermarkets are only taking advantage of it.

Its not the only industry the contracting industry has been doing this sort of thing as well.

Yep. All the supermarkets have been doing this for years. Just political points scoring and another media beat up.

And really goes to show how intense the completion is in the NZ marketplace between both players.

(I spent 30 years of my life involved in the supermarket industry)

mattwnz

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Reply # 992933 23-Feb-2014 17:52

sbiddle:
scuwp:
jeffnz: I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Its quite simple really either the suppliers comply or they don't and it is they that keep this type of practice going the supermarkets are only taking advantage of it.

Its not the only industry the contracting industry has been doing this sort of thing as well.

Yep. All the supermarkets have been doing this for years. Just political points scoring and another media beat up.

And really goes to show how intense the completion is in the NZ marketplace between both players.

(I spent 30 years of my life involved in the supermarket industry)

Do you mean 'competition' when you say 'completion'?

If so, I don't necessarily think that the competition is that intense. I mean you can buy many NZ products cheaper in the UK, and Campbell live has shown that we do pay more for basics, then in Oz and the UK.
I am surprised when the bosses of these places say they offer the 'best prices' for food, but does the 'best price' the lowest price. I don't know what 'best price' is supposed to mean, when prices aren't the lowest.
Different stores owned by the same parent company can have huge variances in pricing, within only a few kms of one another too. Some products can be cheaper and others more expensive. But you would think they would be the same, as they are the same product coming from the same distribution centre delivered to a similar area

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Reply # 992951 23-Feb-2014 18:17

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mattwnz:
sbiddle:
scuwp:
jeffnz: I'm not sure why this is getting so much publicity as its been happening for years, as was quoted.

Its quite simple really either the suppliers comply or they don't and it is they that keep this type of practice going the supermarkets are only taking advantage of it.

Its not the only industry the contracting industry has been doing this sort of thing as well.

Yep. All the supermarkets have been doing this for years. Just political points scoring and another media beat up.

And really goes to show how intense the completion is in the NZ marketplace between both players.

(I spent 30 years of my life involved in the supermarket industry)

Do you mean 'competition' when you say 'completion'?

If so, I don't necessarily think that the competition is that intense. I mean you can buy many NZ products cheaper in the UK, and Campbell live has shown that we do pay more for basics, then in Oz and the UK.
I am surprised when the bosses of these places say they offer the 'best prices' for food, but does the 'best price' the lowest price. I don't know what 'best price' is supposed to mean, when prices aren't the lowest.
Different stores owned by the same parent company can have huge variances in pricing, within only a few kms of one another too. Some products can be cheaper and others more expensive. But you would think they would be the same, as they are the same product coming from the same distribution centre delivered to a similar area

Some spelling fail there.

Yes I do mean competition. It's probably hard for somebody who hasn't been involved in the industry to understand how intense the competition is for a monopoly, but I can assure you it is. I couldn't give you accurate figures now but in an average New World store there were historically somewhere in the vicinity of 300 odd products that were sold below cost at the normal profile price. Why? Because the competition sold them below cost. Products such as Milo were sold below cost on profile, but ironically the store might make 5% when the product was on special.

Pricing is something that differs because the cost of business is very different. A Metro New World store for example has very different costs to a suburban store.

The biggest problem in NZ is the whole Kathmandu model of heavy discounting. Customers won't buy products unless they're heavily discounted which has lead to a retail sector that's pretty much screwed. Companies who tried to stop the highs and lows by averaging pricing out found they simply lost market share.

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