Convenience stores call on ACCC to keep watch as supermarkets plan smaller shops

Carolyn Cummins
October 10, 2014
www.theage.com.au

Death of the milk bar? Supermarkets are looking to buy into the corner store market. Photo: Anu Kumar
A battle is looming between the major supermarkets and corner store operators, with peak industry bodies warning operators to keep the game fair and the playing field level.
Woolworths has lodged a development application for a new, smaller store near Sydney’s Central Station and is scouring capital cities for smaller sites, in competition with convenience-style stores.
The other supermarkets, including Coles and Metcash, are also said to have strategies to introduce smaller stores, to cater for new apartments in the cities, which have smaller retail sites at ground level.
But the Australasian Association of Convenience Stores has said supermarkets’ growth strategies have raised questions for the smaller operators.
Woolworths already has a smaller format store in Sydney’s Woolloomooloo area and will use that as a benchmark for its proposed 200 to 400 square metre sites.
Chief executive of the AACS Jeff Rogut said there must be a level playing field in the retail sector.
Speaking from the US, where he is attending the NACS Show, the largest global convenience conference and exhibition, Mr Rogut said it will be important for the ACCC and other regulatory bodies to ensure convenience stores and small businesses in general are not disadvantaged by such a strategy from the major chains.
Price is one area to watch, according to Mr Rogut, while the unfair restrictions on convenience stores selling packaged alcohol, for instance, will be thrust into the spotlight.
“It will be important to ensure the retail environment is competitive should the major chains push ahead with such a strategy. For instance, we would be concerned if schemes similar to the previous excessive fuel discounting were to be introduced,” Mr Rogut said.
This comes as the Australian Competition and Consumer Commission gave its stamp of approval to the findings of the draft report of the Harper competition review.
ACCC chairman Rod Sims said he supported the Harper panel’s focus on both opening as many sectors as possible up to the disciplines of competition, and getting the settings of the competition law right.
“The Harper panel’s draft report identifies a considerable amount of micro-economic reform,” Mr Sims said.
Mr Rogut said he hopes the ACCC will be closely following what the supermarkets are doing to rejuvenate their business model to ensure small businesses are not disadvantaged and anti-competitive behaviour does not eventuate.
Mr Rogut said the fact the major chains were looking to the convenience model is evidence of the industry’s strong performance in recent times.
As well as offering fresh and packaged groceries, the corner stores and supermarkets are also looking at the potential for having lockers available to collect online shopping items.
In the US, Ebay and 7-Eleven are looking at a joint proposal to have lockers in the stores, while Amazon.com is considering opening a bricks-and-mortar store.
Read more: http://www.smh.com.au/business/retail/convenience-stores-call-on-accc-to-keep-watch-as-supermarkets-plan-smaller-shops-20141010-114cet.html#ixzz3FzIp3lIm