Nationals leader David Littleproud slams Coles for | Australian Markets

Nationals chief David Littleproud has hit out at Coles after the grocery store giant flagged a 10 per cent cull in its product vary offering to consumers.

The grocery store giant will cut more than 2000 objects from its huge 20,000 vary as half of rationalisation program to easily its provide chains and take away duplication on its cabinets.

Mr Littleproud, talking with NewsWire on Thursday, stated the transfer would increase costs on the checkout.

“This is a direct measure to try and reduce competition to push up prices and push up their margin,” he stated.

“It’s as simple as that.

“You don’t take competition away from the shelves, unless you are trying to do one simple thing: rescue competition and increase prices.”

QUT retail advertising and client behaviour professional Professor Gary Mortimer cautioned, nevertheless, the cull might probably result in a small drop in costs for consumers if the company secured an total discount in its value base.

“Even if it is one or two per cent (reduction) in supply chain costs, you would hope to see that materialise in some lower food prices for shoppers,” he stated.

“Once you reduce your range, you reduce your complexities.

“For example, you might have five different suppliers for tinned tuna and within those tinned tunas, you might have 12 varieties of flavour.

“Once you remove that complexity out of your supply chain, it reduces your costs … you don’t have to deal with so many suppliers … once you strip out those costs, hopefully what that leads to is lower prices at the checkout.”

Mr Littleproud stated he was “cynical” the cull would ship decrease prices to customers.

“They (Coles) have got a long and chequered history around this and when you start seeing fundamental shifts in restrictions in the numbers of products that they are going to put on their shelves, that’s a simple basic economic principle, that you are reducing competition,” he stated.

“And when you reduce competition, you reduce choice and you increase prices.”

Coles chief operations and sustainability officer Anna Croft flagged the cull to buyers in November final 12 months, confirming the company would pursue a “double digit rationalisation” program in 2025.

“We have 13 basic table salts. We don’t need those,” she stated.

“We might go to five and we might add three different types of salt in to give customers more choice.

“Take one of our leading hair-care brands, we have six different pack sizes ranging from 80ml to 1.1 litre.

“Now that drives huge complexity. We might not need six, we might have three, and we’ll work with that leading manufacturer to say what’s the right architecture and how do we pull that through in the same space so that we improve availability, we improve efficiency end-to-end.”

Croft stated the transfer would ship more “choice” to its prospects.

“We will be simplifying overall but we’re reinvesting in the categories in the space that makes the most amount of difference to customers,” she stated.

“So yes, net reduction, but it will be reinvestment in categories and removal of duplication that we think we can add more choice to customers and be very data-driven, thoughtful and purposeful around how we do that to make sure it’s tailored to the right categories.”

Professor Mortimer stated most consumers would not going discover the change.

“I don’t think consumers will actually notice any sizable difference when they are doing their grocery shopping each week,” he stated.

“You take a supermarket with 20,000 items, well 2000 will disappear. But it certainly won’t be Coca-Cola, Cadbury block chocolate, Sanitarium Weet-bix.

“It won’t be your big core brands. It will essentially be fringe brands or those ‘nice-to-haves’.”

The $25bn retail giant has come beneath sustained scrutiny in latest months alongside competitor Woolworths round issues Australia’s comparatively concentrated grocery store panorama might be inflating costs for customers.

The ACCC has labelled Australia’s grocery store panorama as an “oligopoly” or a market typified by a small quantity of dominant corporations and probably uncompetitive practices.

Coles CEO Leah Weckert, showing on the watchdog’s inquiry into grocery store costs in November, pushed back towards any assertion the market was not aggressive.

“There are two large retailers and the important piece is do they compete?” she stated.

“I can assure you that competition is very fierce.”

Woolworths controls about 38 per cent of the share of grocery store retail gross sales, the ACCC has discovered, whereas Coles controls about 29 per cent.

Aldi controls about 9 per cent, Metcash 7 per cent and others, resembling retailers IGA and Drakes, account for about 17 per cent.

Mr Littleproud stated the Coalition would set up a “supermarket commissioner” to independently assess the behaviour of supermarkets if elected to authorities.