Milk Price War?

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networkn

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#99196 14-Mar-2012 14:36

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.

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?

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#595116 14-Mar-2012 14:41

Actually it seems to be working , for the first time in years , i paid under $3 for a two litre milk at pakn save , and it seems ever dairy has signs out saying two 2 litre for $6

Common sense is not as common as you think.

networkn

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#595118 14-Mar-2012 14:43

vexx: big difference between $1 a litre and $3 though

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#595119 14-Mar-2012 14:48

networkn: vexx: big difference between $1 a litre and $3 though

Yet still half of six.

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#595122 14-Mar-2012 14:54

Shouldn't be more expensive than petrol which is imported and has a high refinement cost though right?

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#595123 14-Mar-2012 14:54

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.

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?

Nosh are a small player who sell plenty of other high margin products in their stores to compensate for selling milk as a loss leader. There is no way a supermarket could sustain the losses that Nosh are absorbing if it was scaled.

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#595126 14-Mar-2012 14:55

I'd suggest to you that no supermarket would go bust offering milk for $1.50 a Litre, and I'd suggest that Nosh isn't losing that much per milk only sale. Supermarkets have hundreds of times more products to offer than Nosh does and at a scale they can't compete with.

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#595130 14-Mar-2012 14:58

networkn: I'd suggest to you that no supermarket would go bust offering milk for $1.50 a Litre, and I'd suggest that Nosh isn't losing that much per milk only sale. Supermarkets have hundreds of times more products to offer than Nosh does and at a scale they can't compete with.

Nosh is losing serious money on every milk only sale.

The wholesale price for milk is somewhere between 50 - 100% more then nosh's price.

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#595136 14-Mar-2012 15:01

jbard:
networkn: I'd suggest to you that no supermarket would go bust offering milk for $1.50 a Litre, and I'd suggest that Nosh isn't losing that much per milk only sale. Supermarkets have hundreds of times more products to offer than Nosh does and at a scale they can't compete with.

Nosh is losing serious money on every milk only sale.

The wholesale price for milk is somewhere between 50 - 100% more then nosh's price.

My understanding is different from that, in that they got a pretty good deal going with the wholesaler.

Having said that, neither the supermarkets or Nosh would be making many Milk only sales and I'd suggest Nosh had a record breaking month :)

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#595141 14-Mar-2012 15:05

networkn:
jbard:
networkn: I'd suggest to you that no supermarket would go bust offering milk for $1.50 a Litre, and I'd suggest that Nosh isn't losing that much per milk only sale. Supermarkets have hundreds of times more products to offer than Nosh does and at a scale they can't compete with.

Nosh is losing serious money on every milk only sale.

The wholesale price for milk is somewhere between 50 - 100% more then nosh's price.

My understanding is different from that, in that they got a pretty good deal going with the wholesaler.

Having said that, neither the supermarkets or Nosh would be making many Milk only sales and I'd suggest Nosh had a record breaking month :)

Their are other places selling milk for $1 a litre, not on the same scale as nosh but still moving a lot of milk.

Currently they pay $1.78 per litre of milk and 62.3% of sales are milk only.

They have people driving up to 10km just to buy milk from them.

All the milk comes from the same place so i doubt the wholesaler is that interested in selling milk much cheaper to one company when they can sell it to others for much more.

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#595143 14-Mar-2012 15:11

sbiddle:
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.?

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??

Nosh are?a small player who sell plenty of other?high margin products in their stores to compensate for selling milk as a loss leader.?There?is no way a supermarket?could sustain the losses that Nosh are absorbing if it was scaled.

??

Loss leaders can come out of the marketing budget. In Oz they often have milk as a loss leader. I believe our supermarkets in NZ do very well.

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#595165 14-Mar-2012 15:48

How does one apply pressure in these situations?

the best thing you can do is choose to buy your groceries (all your groceries) from Nosh and other places that offer cheap milk.

The reason supermarkets have not responded to the price discounting will be because they don?t need to. i.e. they are not seeing a drop in sales big enough to justify fighting back. Ifpeople want to eact change they need to switch to a competitor who offers what they want (Nosh,in this case)

This is the case for virtually every product that exists.

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#595170 14-Mar-2012 15:53

blame fonterra?

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#595171 14-Mar-2012 15:54

the middleman ALWAYS gets the biggest slice of the pie, ALWAYS ... fruit and veges, milk, insulation, you name it

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#595192 14-Mar-2012 16:48

joker97: blame fonterra?

Its a place to start. 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.

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#595201 14-Mar-2012 17:01

/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.

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