The ACCC found that Aldi, Coles and Woolworths have increased their average product margins over the last five financial years, particularly for branded goods in household and packaged food categories, and that they are among the most profitable supermarket businesses globally. The ACCC also found that suppliers pay a significant amount to Coles and Woolworths for promotions and ancillary services.

The final report follows an interim report released in September last year, in which the consumer watchdog found that Australian shoppers had lost trust in supermarket pricing, with more shoppers comparing prices between stores before making a purchase.

Following that report, the ACCC held a series of private and public hearings with representatives of the major supermarkets as well as key consumer and supplier groups to gain a more complete understanding of the key issues in the retail grocery sector and its associated supply chains.

“In the past 12 months the ACCC has heard from more than 20,000 consumers who responded to our consumer survey, received more than 100 public submissions, held eight supplier roundtables, reviewed tens of thousands of internal documents, conducted private hearings and 10 days of public hearings, and analysed billions of points of supermarket data,” Mick Keogh, the ACCC’s deputy chair, said.

“Based on this extensive analysis we have recommended a range of measures to improve conditions for competition in the sector and deliver better outcomes for consumers and suppliers.”

The 20 recommendations aim to make it easier for consumers to compare prices across supermarkets; enable new or smaller supermarkets to enter the market and expand at scale; improve price transparency, particularly around promotions and shrinkflation; and give fresh produce suppliers greater transparency about the weekly tendering processes supermarkets use to negotiate price and volumes with suppliers.

“There is no ‘silver bullet’ that will address all the issues we have identified in the supermarket sector, but we are confident that our recommendations will make a difference for consumers, will equip suppliers to make more informed business and investment decisions while bearing a more appropriate level of risk, and will boost competition in the sector,” Keogh said.

In a statement released on Friday morning, Coles acknowledged the release of the report and said it was reviewing the report and its recommendations in detail. 

“Over the past 18 months, we have actively participated in the ACCC’s Inquiry as well as eight other inquiries and reviews into the sector,” the statement said.

“Coles believes Australia’s grocery sector is highly competitive, is evolving rapidly, and offers consumers greater choice than ever before.”

The supermarket noted that in recent years it has not only been competing with traditional supermarkets like Woolworths and IGA but also major multinational players like Aldi, Costco, and Amazon. Coles’ market share is less than 30 per cent.

“Coles welcomes any recommendations that improve transparency for suppliers and customers but cautions against measures that will increase red tape and drive up costs. We will review all of the recommendations in detail,” the company stated.

Woolworths and Aldi Australia had not released a statement about the report at the time of this writing.

The ACCC’s 20 recommendations are:

1. Governments should consider support for community-owned stores in limited choice areas (particularly remote areas) with appropriate governance measures
2. Supermarkets should be required to publish pricing information
3. Governments should adopt measures to address planning and zoning issues
4. Supermarkets should be subject to minimum information requirements for discount price promotions, supported by record keeping obligations
5. We support the Australian Government’s proposal to consult in relation to proposed changes to the Unit Pricing Code
6. Supermarkets should be required to publish notifications when package size changes occur in a manner adverse to consumers
7. Coles and Woolworths should be required to provide members with periodic loyalty program information disclosure summaries
8. Coles and Woolworths’ loyalty program practices should be reviewed in 3 years
9. We recommend measures to strengthen complaints handling mechanisms in remote locations
10. Supermarkets should not be able to negotiate out of key minimum protections in the Food and Grocery Code
11. Harmonisation of accreditation and auditing requirements
12. Aldi, Coles and Woolworths should be required to provide fresh produce suppliers with detailed information about their supply forecasts
13. Aldi, Coles and Woolworths should be required to provide fresh produce suppliers with greater transparency about the weekly tendering processes they use to negotiate price and volumes with suppliers
14. Greater transparency about supermarkets wholesale fresh produce prices
15. Aldi, Coles and Woolworths should not be able to unilaterally reduce wholesale fresh produce prices or volumes agreed with suppliers
16. Greater transparency for growers who sell fresh produce through intermediaries
17. Suppliers of supermarket branded fresh produce to supermarkets should have earlier certainty about orders placed with them
18. Suppliers should be allowed to apply their own branding to fresh produce
19. There should be greater transparency about the rebates suppliers pay to supermarkets
20. Coles and Woolworths should be more transparent about how supplier funding contributions to their inhouse retail media services are used.

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Sponsored by Shopify, the lineup is once again packed with impressive and inspiring brands and businesses that are at the forefront of industry trends, from sneakers and sustainability, to digital fashion and medicinal cannabis. Whether they’re big or small, established players or relative newcomers, these retailers stand out for their incredible stores, amazing customer experience, innovative use of technology and commitment to social issues. 

Now in its fourth year, the 20 Coolest Retailers in Australia was compiled by the Inside Retail editorial team, including Heather McIlvaine, Dean Blake and Anil Prabha, with valuable input and advice from our panel of experts. Thank you to The General Store partner and CEO Matt Newell and partners and chief strategy officer Danny Lattouf, as well as Rosanna Iacono, managing partner at The Growth Activists, and Nicola Mansfield, chief thinker at The Design Thinkers.

The 20 Coolest Retailers in Australia is now available in the November issue of Inside Retail Magazine, or you can download the latest report for free.

Download the Coolest Retailers in Australia 2021 report

Download the Coolest Retailers in Asia 2022 report

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You can download the report for free here.

Sponsored by CouriersPlease, the Top 50 highlights the talented people working behind the scenes in all areas of E-Commerce.

It is based on a rigorous application process, with candidates asked to describe their achievements from the last 12 months in four areas (commercial success, knowledge sharing, innovation, and broader impact) and responses scored by a panel of expert judges. The final ranking is determined by each candidate’s average score.

This year’s list includes C-level executives with decades of leadership experience, alongside start-up founders and digital specialists with a wide range of skills, from marketing to logistics. Many of them have appeared in the Top 50 once or twice before, with a handful appearing in the Top 50 for the fifth time.

Having joined Adore Beauty from the tech industry almost two years ago, O’Shannessy is a newcomer to the Top 50, but she impressed the judges with her strategic roadmap for growth and commitment to values-based leadership.

“The financial results driven by Tennealle were as impressive as her efforts to highlight inequality across the beauty industry. Launching innovative podcasts, a loyalty program, and mobile app reinforced Adore Beauty as the destination for beauty discovery, whilst website personalisation transformed the customer experience,” Peta Granger, a retail consultant and one of this year’s judges, said.

The full judging panel included:

• Heather McIlvaine, features & premium editor – retail, Inside Retail
• Paul Roper, chief commercial officer, CouriersPlease
• Shannon Ingrey, vice president and general manager, APAC, BigCommerce
• Meray Azar, digital retail specialist
• Sonya Pala, general manager, Australia, Faithfull the Brand
• Peta Granger, retail consultant
• Paul Waddy, owner, Paul Waddy Advisory
• Mal Chia, founder, Mal Chia & Associates
• Kingston Lee-Young, CEO, The Digital Mavens

If you’d like to find out who else made it into this year’s Top 50, check out the full list here.

This story first appeared on our sister publication Inside Retail

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Presented by the Darwin Aboriginal Art Fair Foundation (DAFF) as part of the Indigenous Fashion Projects program, the awards aim to shine a light on the innovation, diversity and ethical practices of Aboriginal and Torres Strait Islander creatives, whilst contributing to the capacity building of the sector.

The awards are supported in part by Country Road, which provides a 12-month mentorship to the winner of the fashion design award, covering areas such as product development, legal, marketing and sustainability.

RMIT, Darwin Innovation Hub and the Northern Territory Government via NT Major Events Company also support the awards.

This year, 31 Aboriginal and Torres Strait Islander artists and fashion designers were nominated, with winners selected from six unique categories: cultural adornment and wearable art, fashion design, textile design, community collaboration, environmental and social contribution and special recognition.

Here are this year’s winners:

• Paul McCann (Melbourne, VIC), for the Cultural Adornment and Wearable Art Award – co-presented with DAAF).
• Denni Francisco, Ngali (Melbourne, VIC), for the Fashion Design Award – co-presented with Country Road.
• Eunice Napanangka Jack, Ikuntji Artists(Haasts Bluff, NT), for the Textile Design Award – co-presented with RMIT University.
• Anindilyakwa Arts with Dr Aly de Groot and Anna Reynolds (Groote Eylandt, NT), for the Community Collaboration Award, co-presented by Darwin Innovation Hub.
• Mylene Holroyd of Pormpuraaw Art & Culture featuring Simone Arnol designs (Cairns/Pormpuraaw, QLD), for the Environmental and Social Contribution Award – co-presented with Northern Territory Government.
• Bima Wear (Tiwi Islands, NT), for the Special Recognition Award – co-presented with Northern Territory Government.

This story first appeared in our sister publication Inside Retail

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Announced on Tuesday, the new rule applies to management, security, cleaners and frontline centre personnel and is meant to encourage safe behaviour as well as reduce the possibility of transmission of the coronavirus.

“We have this important opportunity to lead by example within our communities and help reduce the transmission of COVID-19,” Kelly Miller, general manager of Mirvac Retail, said in a statement.

“There is no more visible way to demonstrate how serious we are at Mirvac Retail centres about promoting proactive safety, hygiene and social distancing measures to keep our customers, retail partners and our teams, safe.”

Currently, face coverings are only required in the state of Victoria, which has been battling a resurgence in new cases of COVID-19 for the past month. Just this week, Premier Daniel Andrews implemented tough new restrictions on businesses and residents in metropolitan Melbourne, including the shutdown of non-essential services and a nightly curfew.

However, a small but worrying uptick in cases in other parts of the country has led several major retailers to proactively ask customers and staff to cover their faces, even though it is not yet required by the government.

The retailers include Wesfarmers’ bricks-and-mortar retail businesses (Bunnings, Officeworks, Kmart, Target), Woolworths (Woolworths Supermarkets, Big W, Dan Murphy’s and BWS) Amazon Australia, Chemist Warehouse, Coles, Costco, Cotton On Group, Country Road, David Jones, Harvey Norman, JB Hi-Fi, McDonald’s, Mecca, Myer, Priceline, 7-Eleven, Super Retail Group (Rebel, Super Cheap Auto, MacPac, BCF) and The Good Guys.

This is in response to a call by the Australian Retailers’ Association to strongly encouraging customers and staff to wear face masks in stores located in national hotspots, including parts of New South Wales.

“Masks are now a focus globally as an important means of reducing the risk of infection for staff and customers as infections continue to spike,” ARA CEO Paul Zahra.

“We are asking retailers around the country to introduce a store protocol which strongly encourages their use to help us get ahead of the infection rates.”

Zahra said unless there is a reversal of current infection trends, Australians could expect to see tougher restrictions including mandatory face coverings in states and territories outside of Victoria.

Over the past week, NSW Premier Gladys Berejiklian has advised more widespread use of face coverings in the state, including in supermarkets and on public transport. Masks are currently still voluntary in NSW.

This story first appeared on our sister publication Inside Retail

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In the video, the customer, who has been dubbed “Bunnings Karen” on social media, tells Bunnings staff members that they don’t have the right to ask her to wear a mask, or to question her reason for not wearing one, and threatens to sue them.

One of the staff members responds that wearing a mask is a condition of entry to Bunnings stores, but does not further engage with the customer. Later, police were involved, according to media reports.

Bunnings has said it is proud of the way its team members handled the incident.

“The customer’s behaviour towards our team was completely unacceptable and we’re proud of the way our team calmly and professionally handled the situation,” Deb Poole, Bunnings’ chief operating officer, told Inside Retail.

According to Poole, Bunnings has a well-established process in place for handling people who refuse to wear a mask in stores where they are required, and has trained all team members on what to do.

“We won’t tolerate abuse against our team members and we have security at all metro Melbourne and Mitchell Shire stores as support. Our team will also alert the police should they encounter any difficulties,” she said.

Dominique Lamb, CEO of the National Retail Association, praised the interaction as a textbook example of how to respond to customers who refuse to wear a mask.

“The employees in this video handle this situation superbly and the police were swiftly involved,” Lamb told Inside Retail.

Only Victoria Police have the authority to enforce the mask mandate in metropolitan Melbourne and Mitchell Shire, which took effect last Thursday, July 23. They can issue $200 on-the-spot fines to people who refuse to cover their faces if they don’t have a lawful reason not to.

Some of these reasons include having a relevant medical condition; being deaf or hard of hearing; consuming food, drink or medication; engaging in physical activity where they are out of breath; smoking or vaping; or emergencies. Infants and children under the age of 12 also don’t need to cover their faces.

But what happens when someone tries to enter a retail store in Melbourne or Mitchell Shire without a face covering?

Some retailers are not stopping people, citing the fact that there are legitimate reasons why someone might not be wearing a mask, but others say mask-wearing is important to protect the health and safety of everyone in the store, including other customers and staff. And if they operate on private property, like Bunnings, they can legally make it a condition of entry to their stores.

In these cases, retail workers are often the ones tasked with asking customers to comply with the rules, so it’s important they are trained on what to do, according to Lamb.

“Similar to most retail crime issues, it is not ideal to have employees enforcing laws relating to masks, assault or theft. However they are often the workers who are confronted first,” she said.

“As a result we have seen retailers invest in significant training around this issue and also to put in place protocols that include security and calling police in order to enforce the relevant laws.”

But Josh Cullinan, secretary of the Retail and Fast Food Workers Union, believes employers are responsible for monitoring and enforcing safe work practices and said staff should not be required to perform them.

“We do demand that employers not put front line staff in harm’s way – such as by requiring them to perform mask enforcement, check bags of shoppers or confront offenders,” Cullinan told Inside Retail.

“At this time, having senior managers at entries or competent security guards is simply [a] cost of doing business.”

Retailers in shopping centres may benefit from the security provided by centre management, which could alleviate the pressure on workers on the shop floor. The Shopping Centre Council of Australia has provided guidance to all its members on the new requirement, executive director Angus Nardi said.

“Generally speaking, if someone enters a centre without a face covering, they may be asked if there is a valid reason for not wearing one and depending on the circumstance provided with one, directed to where one can be purchased, asked to leave the centre or if Victoria Police are present, there is a risk of them being issued with a fine,” Nardi told Inside Retail.

Nardi underlined the fact that the vast majority of people in Victoria are complying with the mask mandate. Even when face coverings were only recommended and not officially required, he said 85 to 90 per cent of people were wearing masks at major centres.

Last weekend, he said, only a handful of people entered shopping centres in Melbourne and Mitchell Shire without face masks. Some of them had lawful reasons not to wear a face mask, and others were either given a mask or told where they could purchase one.

This story first appeared on our sister publication Inside Retail

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One is around the enforcement of mask-wearing in shopping centres and stores; the other is around the large number of retailers selling reusable cloth masks that do not meet health department guidelines.

On Tuesday, the Shop, Distributive and Allied Employees’ Association (SDA) said shoppers should not be allowed into stores without masks but said retail staff should not have to be the ones to enforce this.

“If a government announces that masks are mandatory, the police should enforce the law, to do otherwise puts the health and safety of retail workers and shoppers at risk as well as sending a mixed message to the community,” Gerard Dwyer, national secretary of the SDA said in a statement.

Myer, David Jones, the Country Road Group, Kmart, Target, Officeworks and Bunnings have all said they will not allow customers to enter stores in metropolitan Melbourne and Mitchell Shire if they’re not wearing masks.

Harvey Norman said it will require mask-wearing except for people with medical issues and children under 12, and Woolworths said it will not enforce mask-wearing, because of the range of personal circumstances where masks are not recommended, according to The Age and The Sydney Morning Herald.

The retailers did not say how they plan to enforce this policy, but the SDA is urging shopping centre owners to take the lead.

“It would be of great assistance if shoppers were not permitted to enter shopping centres without a mask in line with the Retail Recovery Protocol agreed by the SDA, the National Retail Association, the Australian Retailers Association, the Shopping Centre Council and the Pharmacy Guild on 1 May,” Dwyer said.

Many cloth masks fall short of health recommendations

When it comes to wearing a mask, the Department of Health and Human Services (DHHS) in Victoria has said that any face covering – including a scarf or bandanna – is better than nothing, but if people use a reusable cloth mask, they should choose one that has three layers of a mix of breathable fabrics.

In a guide to making your own cloth mask, the health department also recommended using a water resistant fabric like polyester for the outer layer. This is because the coronavirus is carried in water droplets from coughs and sneezes.

It’s concerning, therefore, that many cloth masks on the market do not meet these criteria. Many businesses are selling reusable masks that only have two layers of fabric, and often, both layers of fabric are 100 per cent cotton, which is not water resistant.

Some two-layer masks do include a pocket for users to insert a disposable filter that can block the virus if the right size filter is used, but many don’t.

Businesses selling these masks typically advertise them as “fashion masks” and say they are not designed to be medical face masks. Many such masks are already sold out, suggesting that consumers either don’t know the masks do not meet the health department’s guidelines or don’t care.

One cloth mask that does meet DHHS guidelines is made and sold by The Social Studio, a social enterprise in Melbourne that employs young people with a migrant or refugee background in clothing manufacturing and design.

Like many retailers, the brand recently pivoted to making cloth face masks, but unlike others, its masks are made out of three layers of fabric with a polyester outer layer.

“Making masks that met the DHHS’s strict requirements was essential for us. We may be a fashion social enterprise but we see this as a health issue,” Aleksandra Nedeljkovic, The Social Studio COO, told Inside Retail.

The organisation has sold over 5000 cloth masks in the past week alone, and generally runs out of stock less than 30 minutes after it adds new inventory each day.

Nedeljkovic said the demand has been “overwhelming”.

“It has been so encouraging that people are so willing to adopt face masks in order to help keep each other safe. The move to compulsory masks has not necessarily increased demand but rather the urgency around getting masks,” Nedeljkovic said.

Iconic Aussie underwear brand Bonds has also taken steps to ensure the face masks it sells meet health and safety standards.

While its “Bonds Protective Comfy Mask” only features two layers of fabric, the outer layer has been treated with HeiQ ViroBlock to enhance the filtration performance of the mask. This mask is on the Australian Register of Therapeutic Goods, which means the brand had to prove that the treatment is actually effective.

A spokesperson for Bonds told Inside Retail that the brand globally supplies a three-layer cotton mask with a focus on filtration. The masks are not registered as Class One medical devices, but still meet filtration requirements.

“All of our products follow strict quality procedures and masks are no different,” the spokesperson said.

This story first appeared on our sister publication Inside Retail

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According to the Amazon Launchpad Innovation Report, more than a quarter of SMEs (28 per cent) said the lockdown helped them innovate for the future and more than a third (35 per cent) said they were able to refresh their business plan, with 38 per cent saying they could focus on creativity during this time.

Drilling into this further, one in four SMEs used their time in lockdown to explore new revenue streams or launch online, one in six created new products or transformed their products and one in five planned for or built a new business or product strategy to move forward.

Of the roughly 1000 SMEs surveyed, 92 per cent said they feel optimistic for the future, despite the current challenges.

Amazon Australia has launched a new grant program that aims to help SMEs capitalise on this innovation.

The e-commerce giant is offering five grants worth more than $80,000 each, including a $20,000 cash grant, Amazon and AWS marketing support and exclusive access to Amazon leadership and entrepreneur experts from Amazon’s office Australia and at its global headquarters in Seattle, among other benefits.

Lack of access to funding is the main reason Amazon is offering the grants, according to Chadd Ciccarelli, head of Amazon Australia’s Launchpad incubator program.

“More than a quarter of SMEs (29 per cent) said that the lack of available funding is the biggest barrier to innovating or growing the business for the remainder of 2020 and more than half (55 per cent) lacked guidance or mentorship during this time,” Ciccarelli said.

“We hope that the new Amazon Launchpad Innovation Grants will catapult a new wave of small businesses who have evolved during this time to continue creating and transforming products.”

Applications are open through August 24. The winners will be selected by Carl Hartmann, a serial entrepreneur and co-founder of Lyre’s Non-Alcoholic Spirits, and Renae Smith, of health baking goods brand, Bake Mixes.

This story first appeared on our sister publication Internet Retailing

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The second Adtrust study by Galaxy Research, commissioned by NewsMediaWorks, the peak organisation representing news and media publishers, surveyed more than 4200 Australians over the past 12 months about their trust in the content and advertising across 10 media channels, including newspapers, television, radio, magazines, cinema, outdoor, news websites, non-news websites, social and search.

The findings revealed that consumer trust in the content on social media channels has fallen to -20 and trust in ads has dropped to -28 in just under 12 months since the inaugural study was undertaken.

The majority of Australians (58 per cent) trust Facebook less than they did six months ago and nearly two thirds (63 per cent) said they do not trust advertising on Facebook.

Conversely, trust in the content of printed newspapers has risen 13 points to +48 and trust in ads rose 10 points to +38, making newspapers the most trusted media for both content and ads. News websites were the most trusted digital channel for content and ads.

The research shows that trust in media channels directly drives purchase intent, with 58 per cent of consumers agreeing that the more they trust an ad, the more likely they are to buy a product or service.

“Consumers are now well aware that their personal data is being commercialised and, in some instances, their privacy traded for profit and, as a result, have honed their media choices,” NewsMediaWorks CEO, Peter Miller, said.

“The further erosion of trust consumers have in social media demonstrates they are tuned into the real news, nearly all of which has been revealed by quality newspapers and news websites. That’s where advertisers should be headed too.”

Trust in advertising also changes with age, with respondents under the age of 35 having higher trust in all media channels than older users, especially those aged over 55.

Younger users, despite being heavier users of digital media, ranked ads in newspapers as the most trustworthy of all media, with the study recording a pronounced drop in their trust of ads in social media and non-news websites.

The results are calculated as net figures, that is, the percentage of those that trust a medium minus the percentage of those that mistrust a medium.

Heather McIlvaine, Editor, Internet Retailing

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Hundreds of thousands of products are ready to ship from the online retail giant’s 24,000 square-metre warehouse in Melbourne’s south-eastern suburbs.

Meanwhile, thousands of Australian brands and businesses are selling items through Amazon Marketplace.

According to Amazon, this represents one of its biggest initial launches to date, with even more products, services and delivery options to come in the months and years ahead.

“Focusing on customers and the long-term are key principles in Amazon’s approach to retailing,” Amazon Australia’s country manager, Rocco Braeuniger, said in a statement.

“By concentrating on providing a great shopping experience and by constantly innovating on behalf of customers, we hope to earn the trust and the custom of Australian shoppers in the years to come.”

FBA and Prime still to come

Notably absent from today’s launch are Fulfilment by Amazon (FBA), a warehousing and fulfilment solution for Marketplace sellers, and Amazon Prime, a loyalty program that offers members unlimited free shipping on eligible products, video and music streaming services, access to exclusive products, among other benefits.

Amazon Prime is set to launch in mid-2018, while FBA is said to be coming soon.

Sellers that use FBA in other markets say it’s valuable for several reasons, including lower freight rates, thanks to Amazon’s economies of scale, and intelligent distribution.

Amazon has not said when or where it plans to open other warehouses in Australia, but Braeuniger confirmed the company plans to invest hundreds of millions of dollars in the country and create thousands of new jobs.

Retail impact

The launch today confirms that electronics, fashion, sporting goods and toys will be among the hardest-hit categories, with retailers like JB Hi-Fi and Harvey Norman bearing the brunt of Amazon’s arrival. Categories such as auto and grocery are unlikely to see an impact in the short-term.

The eCommerce giant is already selling several big toy brands, such as Barbie, Batman and Hot Wheels, for up to 30 per cent off the recommended retail price. Calvin Klein men’s and women’s underwear is up to 30 per cent cheaper on Amazon, and Sunbeam kitchen appliances are up to 20 per cent cheaper.

According to a recent UBS report, the eCommerce giant could steal two per cent of retail sales within five years of entering Australia, growing revenues from more than $400 million to about $3.5 billion by 2023.

Shipping

Until now, the biggest question mark surrounding Amazon was its delivery offering in Australia, with some skeptics wondering whether the retail giant could support free same-day or even two-day delivery nationwide.

We now know that Amazon has partnered with several shipping carriers to offer a range of delivery options in Australia, depending on customers’ locations.

Those in Sydney, Melbourne, Brisbane, Adelaide and Canberra can pay $9.99 for priority delivery (one business day) and $5.99 for expedited delivery (two-three business days), while those in Perth and other areas of VIC, NSW and SA can pay $11.99 for priority (one-two business days) and $7.99 for expedited delivery.

Free standard delivery (three-seven business days) is available on orders over $49, except in remote areas of NT, QLD, WA, SA and TAS, where delivery may take longer than 10 business days.

More delivery options, including Prime Now – a same-day delivery service in metro areas – are expected to become available in future.

Heather McIlvaine, Editor, Internet Retailing

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