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.