Archive for 'Supermarkets- the other stuff'

I had the weekend edition of the NZ Herald sitting around on the dining room table all weekend, pondering whether I should add my 5 pence worth to the article entitled Fruit, vege bargains at supermarket in theweekend edition. Then I sat down to watch the 6 o’clock news tonight.  First up –the milk price again. The Minister of Agriculture, David Carter,  now suggests that a Parliamentary Select Committee should investigate milk prices.  The CEO of the Consumers Institute made ridiculous comments on camera about a “secret manual” she alleged Fonterra uses to set milk prices and a TV One reporter found that supermarkets sell 2 litres of milk for $3.60 compared to $5.20 at a dairy and $5.60 at a service station. Doh.  Oh really?  Ah, there is a story that has gone off the rails.  That does not fit the intended direction –because we all know its supermarkets which engage in price gauging right?  Carter, luckily for him, was interviewed on Q & A this morning, rather than in the evening.  His “I never buy my milk at the supermarket and I would encourage consumers to shop around” wisdom therefore went unchallenged.  Let’s get some of the facts straight.  Supermarkets are in the volume business which works really well for them with processed food; milk for example.  Milk will always be cheaper in a supermarket  than in a dairy or service station, so please stop wasting time during the news bulletin and instead report the real issues we want to hear about.  When have you last seen a super market chain advertising  milk or bread at special prices or even as a loss leader?  The answer is “you have not” as it simply does not happen. The same goes for eggs by the way. They could, but they typically do not!  Accusing supermarkets on price gauging on those products is therefore an exercise akinto shooting oneself into one’s foot!  Back to the Herald’s fruit & veg story.  At a time of extreme shortages, you can rely on supermarkets to exert pressure to keep the prices down. Not because they want to be good citizens but out of self interest.  They have worked out a few years back that consumers have a pain threshold. When cauliflower prices go beyond $3.99 per head retail, consumers pull the hand break.  Tomatoes at $20 is pipe dream territory of unheard proportions.  Food & Grocery Council CEO Katherine Rich also has a thing or three to learn about the fresh produce value chain, judging by her comments in the NZ Herald story.  Of course, the produce will be fresher at a farmers market – if it has been locally grown and is being sold by the grower himself.  And of course, supermarkets are subject to greater controls and attempt to offer produce of greater uniformity.  And where do we think the produce supermarkets does not buy disappears to, hm? Whilst it is great that we as a society are focusing back on the basics, i.e., the quality and availability of our food and its price, there is a lot of nonsense being talked out there and the sooner that changes the better.

Whilst in mainland China, I had the opportunity to catch up with an old work colleague and boss from my days in the supermarket trade at Foodtown here in New Zealand. He kindly took me around several of the many stores under his aegis.

They are part of the BuBu Gao (Better Life) Company, which has over 140 stores in the Hunan and Jiangxi provinces. They have a diverse range of retail interests, including both supermarkets and hypermarkets. For those who have noticed the ubiquitous Golden Arches in the photos, yes – BuBuGao have a working relationship with McDonald’s. They are one of the few wholly Chinese owned supermarket chains operating in China.

Chairman Mao might have been gone for a while but he is omnipresent in the BuBu Gao entrance foyer.

Ol’ Sue Kedgley might be a loony lonely voice in this country when she engages in supermarket bashing , or anything else for that matter, but the topic of supermarkets and how they shape and impact upon society’s social fabric is not one she can copyright.  Particularly in the UK, the debate has long moved from the fringe into main stream and a week does not go by without one of the major UK Dailies adding  to the topic.  Here is a contribution from the Telegraph.

Are you supplying a supermarket chain with your produce?  Indirectly through a broker or market?  Directly to a distribution centre or a store?  Are you worried about your margins?  Well, it seems you are not the only ones.  Grocery manufacturers  also have a few things to say these days.  In one of the better articles in the Business Herald for some time, reporter Christopher Adams discusses the threat of shrinking grocery manufacturers’ margins using Kiwi icon Weetbix as an example.

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Woolworths Australia has been pretty clear in its 2010 messages.  The “Triple Dip” approach to managing its supermarket brands in New Zealand will be abandoned. The Woolworths and Foodtown brands will disappear. Countdown will reign supreme and takes on the competition. Nothing wrong with that at all – and the message that an iconic New Zealand brand is up for grabs seems to be getting  through, judging by this shop sign I came across in central Wellington earlier this year!

It seems the Foodtown brand will survive after all!