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Rikkitic

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#284292 12-Apr-2021 12:08
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Do supermarkets give each other ‘exclusive rights’ on certain items or is there something else going on here? I am a vegetarian and I buy the Veggie Delights ‘classic hot dogs’. They used to only be available from Countdown and I didn’t think much of it. Then Countdown stopped stocking them. A little later I found them at New World, which is now the only place that stocks them.

 

In other countries different supermarkets stock the same product lines, as ours here also do for many things that are not the store’s own brands. But I wonder if I can spin this particular example into a conspiracy theory. I remember several years ago our local New World suddenly stopped stocking a particular organic milk. I complained and had a long discussion with the store manager about this. Eventually he admitted that orders had come from the New World franchise headquarters to stop stocking this particular milk brand. He didn’t say why and the discussion ended there.

 

New Zealand does seem to be a country with a monopoly problem (too many to quote here, look up Commerce Commission). So is there something nefarious going on here or does it have a legitimate reason? Why can’t you go into any supermarket and find the same items as in any other one, excepting the store brands, of course? Is it Q’s fault?

 

  





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CrashAndBurn
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  #2691363 12-Apr-2021 12:15
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From what I understand, product makers pretty much buy "shelf/space" rights from retailers to sell their items. From here you add other conditions such as exclusivity and volume and margins amongst other things. It is possible that it was a slow mover for Countdown at that store hence they decided to let go of it and allocate the space to another product that has a quicker turnover.


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floydbloke
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  #2691364 12-Apr-2021 12:19
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Something along those lines certainly appears to happen at DIY stores, i.e. you can only buy Ryobi at Bunnings.

 

It also seems that manufactures provide different SKUs for the exact same product to Mitre10 and Bunnings, to prevent exploitation of price matching and 15% discount I expect.  I found this out when I was in the market for a bathroom tap.  They both sell the Foreno brand.  Identical looking taps with the same dimensions and speciifcations will have different sub-branding and part numbers.

 

It also seems that certain specific laptop model numbers from the 'big' manufacturers can only be found at specific 'tech' chains (NL, HN)

 

 

 

 

 

 





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Rikkitic

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  #2691365 12-Apr-2021 12:21
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That just makes it all so much more complicated! What is the point of one stop shopping if you can't get it all at one shop?

 

 





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LostBoyNZ
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  #2691367 12-Apr-2021 12:28
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CrashAndBurn:

 

From what I understand, product makers pretty much buy "shelf/space" rights from retailers to sell their items. From here you add other conditions such as exclusivity and volume and margins amongst other things. It is possible that it was a slow mover for Countdown at that store hence they decided to let go of it and allocate the space to another product that has a quicker turnover.

 

 

That's what I understand too. I know from experience (6 years ago at least) that Countdown sells the endcaps (the displays at the end of isles) and they sell being promoted in the mailer. I'd be pretty sure they sell shelf/space rights too. Taking soft drinks as an example, look at the space Coke gets vs Pepsi. Yes Coke vastly outsells Pepsi, and in part I know the shelf space is sometimes taken by pushy reps and merchandisers, but I'd be pretty sure deals go on.

 

It'd be really interesting to hear someone who works in the industry.

 

For stacking / not stocking some products in New World, I believe it comes down to individual stores too. At least in the South Island (I don't know about those in the North Island but they are run a bit differently there), they're owner operated, so one branch may buy in some items that other stores don't, or may decline to stock some.

 

 

 

 





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CrashAndBurn
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  #2691370 12-Apr-2021 12:31
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Rikkitic:

 

That just makes it all so much more complicated! What is the point of one stop shopping if you can't get it all at one shop?

 

 

Space is a premium as it is limited. 

 

I remember when I was younger and working at my parent's snack shop overseas. Coke and Pepsi tries to one-up each other almost every 6-12 months to get my parents to sell their product. Starts with a free display fridge, then volume discounts e.g. every 10 cases you get a case free. The other party will then go free 2 cases. Until something has got to give.


floydbloke
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  #2691374 12-Apr-2021 12:42
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CrashAndBurn:

 

...

 

Space is a premium as it is limited. 

 

...

 

 

 

 

[rant]

 

Not at *&^%ing Pak'n'Save Porirua it ain't....can't be......half the shelves are always empty...they always seem to be sold out of a lot of the things I go in there for.

 

[/rant]

 

 





I've joined a carpenters course.  Haven't made anything yet....we've only just begun.

 

 


CrashAndBurn
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  #2691376 12-Apr-2021 12:44
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floydbloke:

 

CrashAndBurn:

 

...

 

Space is a premium as it is limited. 

 

...

 

 

 

 

[rant]

 

Not at *&^%ing Pak'n'Save Porirua it ain't....can't be......half the shelves are always empty...they always seem to be sold out of a lot of the things I go in there for.

 

[/rant]

 

 

Are those local items that are empty? As could be due to shipping delays due to covid/Auckland port/Suez canal?




OldGeek
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  #2691380 12-Apr-2021 12:49
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The issue of product availability at retail level is usually simply a product of commercial reality.  With Mitre10 vs Bunnings, the price matching is always 'for an identical product' so each has an incentive to sell products exclusively available only from them.  Sometimes this will be an entire brand but mostly it is specific models.  For example, both Mitre10 and Bunnings sell Karcher waterblasters, but the same model is never stocked by both.

 

It all boils down to money - both the supplier and the retailer trying to maximise whatever leverage each has over the other.





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OldGeek.


Rikkitic

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  #2691381 12-Apr-2021 12:52
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OldGeek:

 

It all boils down to money - both the supplier and the retailer trying to maximise whatever leverage each has over the other.

 

 

How about consumers maximising whatever leverage they have? If you want my money, give me what I want!

 

 





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LostBoyNZ
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  #2691386 12-Apr-2021 13:05
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Rikkitic:

 

How about consumers maximising whatever leverage they have? If you want my money, give me what I want!

 

 

That's the problem of a monopoly or in our case a duopoly, consumers have basically no leverage. Chances are someone has run the numbers and found that, taking supermarkets as an example, the extra they'd earn by having stock of 'everything' (as you say, home brand products aside) would be much less than the extra they earn by squeezing extra money out of suppliers.

 

And while it isn't right that suppliers might do offers like hey supermarket chain, if you buy x number of this, you can have exclusive rights on this other product, it wouldn't surprise me in the least if those deals happen all the time.





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Lias
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  #2691388 12-Apr-2021 13:09
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Rikkitic:

 

OldGeek:

 

It all boils down to money - both the supplier and the retailer trying to maximise whatever leverage each has over the other.

 

 

How about consumers maximising whatever leverage they have? If you want my money, give me what I want!

 

 

Welcome to free market capitalism at it's worst. Greed is good remember?

 

 





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Oblivian
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  #2691392 12-Apr-2021 13:13
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From reading between the lines for a few years, Product turnover (no point binning shelf life products regularly cause noone is buying it) can be deleted

 

Contracts / Distributor can have a spat and pull product

 

Independent franchise operators can have a say if they have the same as the big-boys.

 

Bottom shelf location costs the wholesaler/distributor less. (budget brands and so forth often there, or squashed) - Eye Level costs a lot more

 

End of isle bays may be there at a loss to the supermarket once you factor advertising and target market (remember 99c 1.5Lt coke days.. they did them over christmas on the chance you splashed out on more christmas food too, basically at a loss factor just to get the Coke brand out there)

 

A lot of this come out over Covid with the perceived pricing fluctuations and 'no specials'/ apparent increases as there was no mail delivery, little advertising or incentive for the reps to keep up with replenishments and distribution chain changes.

 

Basically a supermarket isn't what we all make out or would like it to be. They're a convenience front end to a whole lot of back end trade and distribution that the little guy has less buying power of. So are at the mercy of a heap of factors.

 

Also, take a note of your standard buy pricing since Apr1. on medium items. Might find each item up 20-50c like I have been. And apparently more to come (herald blaming the min wage changes across the entire chain means ~$1 at the shelf)

 

Specialty breads up to $4.30. KFC up, Subway up, think most the maccas have gone on some items again. V, Chocolate bars. The usual healthy treats ;)


wellygary
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  #2691400 12-Apr-2021 13:30
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Rikkitic:

 

New Zealand does seem to be a country with a monopoly problem (too many to quote here, look up Commerce Commission). So is there something nefarious going on here or does it have a legitimate reason? Why can’t you go into any supermarket and find the same items as in any other one, excepting the store brands, of course? Is it Q’s fault?

 

 

The big background  for NZ's "monopoly problem" is its small size... to develop large numbers of producers you need a large number of consumers, 

 

Often as markets grow, new competitors can find enough demand and enter ( 2 degrees is a good example)

 

But for Food the demand is pretty much dependant on population, also for smaller producers they may find it hard to have enough production to provide enough stock both chains....


neb

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  #2691406 12-Apr-2021 13:41
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LostBoyNZ:

That's what I understand too. I know from experience (6 years ago at least) that Countdown sells the endcaps (the displays at the end of isles) and they sell being promoted in the mailer. I'd be pretty sure they sell shelf/space rights too. Taking soft drinks as an example, look at the space Coke gets vs Pepsi. Yes Coke vastly outsells Pepsi, and in part I know the shelf space is sometimes taken by pushy reps and merchandisers, but I'd be pretty sure deals go on.

 

 

Another way of getting shelf space is to make twenty differently-packaged versions of the exact same product and require that the seller display all of them, which crowds out anything else. Toothpaste immediately springs to mind here...

neb

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  #2691412 12-Apr-2021 13:47
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Rikkitic:

How about consumers maximising whatever leverage they have? If you want my money, give me what I want!

 

 

That's not the typical consumer though. This is the typical consumer:

 

 


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