Why You'll Soon Have More Supermarket Choices

Supermarkets The dominance of the two big Australian supermarket chains, Woolworths and Coles, is likely to be challenged after the pair signed an agreement with the ACCC agreeing to end restrictive leasing practices. That might sound like arcane financial management talk, but in practice it should result in more supermarket choices in major shopping centres, and hopefully lower prices.

For many years, both Woolworths and Coles have demanded the inclusion of a clause that means no competing supermarkets can open in any shopping centre where they hold a lease. While some property developers like those deals — it gives them a guaranteed major tenant — in areas where there's only one large shopping centre, they effectively mean that a second supermarket can't easily enter the market. The practice is very common, with the ACCC identifying more than 700 leases including those conditions.

Under an agreement announced today, both supermarkets will no longer include those conditions in any new leases they sign. The decision isn't an outright victory, since in the case of existing leases, the practice may continue for up to five years — which means that it could still be a while before you see an Aldi or IGA opening up in the same centre.

Nonetheless, it seems like a useful start, and one that will force Coles and Woolworths to compete on price, service and reward schemes rather than by keeping rivals out of growing areas. Wherever you shop, you can spend less by checking out our top 10 ways to save money on food.

Pictures from Wikimedia Commons (1 and 2)

Supermarket agreement opens way for more competition [ACCC]


Comments

    This is good news.

    But...

    I used to live on the Sunshine Coast in Queensland and there was no Aldi nearby because of these regulations.
    They (Aldi) did try opening one store away from an established shopping centre but the locals signed a petition saying that they didn't want it. There was an IGA convenience store across the road which ran a smear campaign saying that Aldi would force them to close. Nevermind that the IGA was overpriced and didn't employ as many locals as the Aldi would have. Nevermind that Aldi is a proper supermarket and not an extended-hours convenience store. The IGA managed to fool enough locals into believing that Aldi was a threat and so we didn't get one.

    So whilst Aldi may now be allowed to open a store, you may yet have the stupidity of your fellow citizens block the way.

      Looks like the ACCC is really coming down on these monopolies like telstra and now Woolworths and Coles. Good for competition.
      Noosa now has an ALDI which is good for competition I guess. I tried them once and just didn't like what they have or didn't have.

    I hope this applies to smaller fresh food retailers too. I like to get my bread from places like Bakers Delight, rather than buy bread that's been sitting on a supermarket shelf for up to a week, but they're not always conveniently located when you've got a shopping trolley to push. Hopefully this will now start to change!

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