How Supermarkets Flog You Junk Food To Maximise Profits

Supermarkets are an essential part of modern living — open almost all the time, selling almost everything, and selling it cheap. Nowhere is this more true than in Australia. Coles and Woolworths, our two most dominant supermarket chains, are now ranked among the top 20 biggest retailers in the world.

Supermarket picture from Shutterstock

Almost two-thirds of the groceries purchased in Australia are bought from these two stores. The supermarket environment is now a key influence on Australian diets. Unfortunately, the evidence suggests Big Supermarket has an unhealthy habit of promoting Big Junk — soft drinks, chocolate, confectionery and chips.

In a recent Melbourne study, four out of every 10 end-of-aisle displays and every single checkout measured were found to promote these products.

Other research has shown that the promotion of junk food in Australian supermarkets is greatest in disadvantaged suburbs — precisely the areas where obesity is more common.

And compared with supermarkets from seven other countries — the US, Canada, Denmark, Sweden, Netherlands, UK and New Zealand — Australian supermarkets have been shown to be world leaders in the promotion of junk food at checkouts and end-of-aisle displays.

Consumer choice? Or super profits?

While the supermarkets will defend these statistics by telling us that their customers demand and deserve choice, the wholesale promotion of products that we should be eating "sometimes and in small amounts" has nothing to do with choice.

The motive driving supermarkets' promotion of Big Junk? Big profits.

Sales figures guide most decisions in retail. The bottom line of a supermarket chain benefits from the promotion of junk food through both increased sales, and from the fees paid by manufacturers in exchange for a prime positioning on shelves.

But in this case, what is good for the supermarket is bad for the consumer.

Margaret Chan, the director general of the World Health Organization, highlighted the impact of junk food profiteering in a recent speech:

Efforts to prevent non-communicable [lifestyle] diseases go against the business interests of powerful economic operators … In my view, this is one of the biggest challenges facing health promotion … It is not just Big Tobacco anymore. Public health must also contend with Big Food, Big Soda, and Big Alcohol.

With 63 per cent of Australians now overweight or obese, and diabetes rates rising as a consequence, the question then becomes: how do public health interests compete with those of such powerful businesses?

There are two major levers that large corporations seem to respond to: the threat of regulation, and negative public perception that may impact sales. Both are potential targets that could be used to "nudge" Big Supermarket toward healthier environments.

The threat of regulation has only recently seen Coles and Woolworths act to protect suppliers. It isn't a stretch to imagine they might act similarly in response to the prospect of regulation aimed at reducing Australia's rate of obesity.

And in the Australian context of a highly competitive duopoly, public perception is particularly important to both Coles and Woolworths. Public perception can be influenced by effective advocates — individuals, the media or organisations such as the Parent's Jury, the Obesity Policy Coalition and Sustain, in the UK.

The supermarkets also attempt to drive public perception themselves, with Woolworths launching its excellent healthy lunchbox range in recognition of the consumer demand for healthier options and in an attempt to position themselves as "the supermarket that inspires a healthier Australia".

The fact that supermarkets are now using their health credentials as a marketing tool is surely a sign of change in the right direction.

As consumers become more aware of the importance of a healthy diet, will supermarkets realise restricting the promotion of Big Junk may even be good for business?

By concentrating on what motivates Big Supermarket, we may help nudge them into action — and begin to reverse our seemingly intractable obesity epidemic.

Adrian Cameron is a Researcher at Deakin University. He receives funding from the Australian National Health and Medical Research Council.

The ConversationThis article was originally published at The Conversation. Read the original article.


Comments

    ranked among the top 20 biggest retailers in the worldGiven our relatively small population, you have to wonder how they managed to rank so highly...? They wouldn't be there if not for their habit of subverting the competition with rubbish home brands. So I'm not surprised they make a fortune by selling junk food too...!

      Something like 70 cents of every dollar spent in Australia is spent at either Woolworths or Coles (or one of the other stores owned by them). Considering how strong our dollar is at the moment, our high cost of living, and how much in the crap other economies currently are, it starts to make sense.

      Last edited 16/01/14 1:41 pm

        Pretty sure that just proves my point dude... :)

          You asked the question "you have to wonder how they managed to rank so highly...?", I was attempting to answer it :)

          Last edited 16/01/14 1:42 pm

            Actually "you have to wonder" was just me ruminating...
            I still say your comment just proves my point...!

      Just remember Woolworths is part of Australias largest hotel chain, ALH. So it's not surprising when they also own BWS, Dan Murphy's, Masters, Big W, Home Hardware and have their own deal going with Caltex... Not surprised both Coles & Woolies ranked in the top 20 when both are part of a massive network of retail..

        Yeah, good point. :) Still... I have to wonder what they are doing to our economy, given between Woollies and Coles, they are more or less monopolising the industry... :)

          Yeah, they aren't doing any real good honestly. I work for Dan Murphy's and we automatically lower our prices when First Choice put out their specials to beat them, we also price beat anyone else selling alcohol if you can prove it. It's sad how people will do it for 1 or 2 dollars.

    supermarkets sell the spaces at ends of isles at high prices to those who can afford it... i.e. the junk food companies!

    the only real way to shop at supermarkets is to only buy items that are not in the middle or in isles.. just go around the outer perimeter and you will find meat, dairy, fresh vegetables and fruit.

      Another thing to remember for when people do need to go into the aisles is that the stuff placed at eye level is there because that's exactly what the supermarkets want you to buy as they expect that to be the first thing you see and grab (clearly they don't think highly of their customers). Generally it's either the supermarkets own premium brands (Woolworths Select etc) or something the supermarkets have been paid to place there (big name brands etc).

        The problem is - They do it because it works. How can we blame them when after all, they're in it to make a profit because they're a business. If the majority changed their buying habits based on other behaviours or reactions, then the supermarkets would change how they market things to us to match.

        Last edited 16/01/14 4:04 pm

          The problem is - between them and Coles, they have a duopoly, and they don't give a shit about killing off the competition...! Competition is what will keep them honest,.. that and a real code of conduct, not some self regulation bull...

            Yeah, there's a duopoly there, and it's painful. It doesn't excuse people from not being able to educate themselves. Between the Internet and the information *required* on the side of a packet regarding ingredients/nutritional value, there's no reason why someone can't say "This doesn't look healthy" and not buy it. Competition isn't going to change the way things are marketed in stores.

          I realize that the whole point of a business is to make money, but most of the food set out in premium and high traffic areas is unhealthy junk. People need to know the tricks supermarkets use so as to minimize impulse buying.

            All impulse buying is, is a lack of self-control. How is that the fault of the supermarket? I still fail to see why it's up to the supermarkets to change their ways when it's the people that are falling for it. It's not illegal to sell those products, and until it is, people just need to learn to say "No".

    Please, do we really think that supermarkets are deciding our diets? They sell a lot of junk food because people want to buy it. The author already admits that the supermarkets have ranges of healthy foods. And has anyone noticed the size of the fruit and veg selections in their newer supermarkets? They're huge! And I think the margins on fruit and veg are pretty good too.

      I've noticed the selection of fruit and veg has actually decreased in my large Woolies - they simply don't stock a lot of common items. They've got plenty of space for stuff.

      It's not a seasonal issue, since the nearby grocers have plenty of what's missing in stock.

    That "get a big trolley and fill it up once a week" kind of shopping is not a very well hacked way to shop altogether. A whole nuther take on it is to stay out of supermarkets altogether, and shop with a handbasket every day or two, buying just what you need for the next few meals, at the greengrocer, butcher, wholefoods shop, bread shop, deli, fish shop, farmers market. You eat a lot better, both in health and gourmet terms. The prices seem a little higher but in fact you save a lot of money because you waste a lot less. And you avoid the whole musac and bright lights parking and checkout queuing ordeal. And you support local real small business people who also shop locally, rather than giant corporates that don't even pay taxes.

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