Is it fair play?

This is not a new concern but a continual discussion on the effects and value of powerful supermarket’s petrol discount vouchers. Todays blog will touch on the criticisms that Coles has been confronted with recently by the Australian Commission and Consumer Commission (ACCC).

Last year Coles launched a new petrol discount offering, which entails offering its customers an eight cents per litre petrol discount when they spend $30 or more at Coles supermarkets in a single transaction, this is double the previous discount value. The purpose of this offer is to offer a “significant benefit to shoppers”, according to Westfarmers Chief Richard Goyder but this promotion is stimulating concern on the effects it will have on independent petrol stations.

Of course, this resulted in Coles' direct competitor Woolworths to also jump on the bandwagon and match this enticing offer.

According to the ACCC chairman Rod Sims, there are two main concerns including:

  • The negative impact this will have on competition
  • The advantage that powerful price cutters such as Coles and Woolworths have to provide these significant price cuts

Unfortunately for majority of independent petrol retailers, they simply cannot afford to match these discount offers and are in turn heavily declining in business. To paint a picture for you, according to Craig, who is the President of the Service Station association, "Before Coles and Woollies came into the market, there were about 7,800 service stations - we're now down to about 5,500 service stations and that's due to the fact that we can't compete with Coles and Woollies. That's just not possible and of course a lot of service stations have to close".

I am personally on the fence with this topic. On one side, petrol is so unaffordable today that we can all do with a discount but on the other hand, it is notable the effects this has on independent petrol stations on the roads everyday (this morning I drove past an independent petrol station in the process of being demolished). Another factor that us shoppers have to consider, are other items on the shelves increasing in price to compensate for petrol discounts?

To conclude, where are you on the matter and what do you do to support local businesses? We have to really think about this because without independent retailers, there will be no competition, providing ample opportunity for the big players to take over in a variety of industries.

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