Major supermarket chains are significant and increasingly controversial actors in Australian society. Despite the entry of new players into the market, in particular Aldi and Costco, Australia's retail grocery sector remains highly concentrated. The top four players account for almost 90% of the market, with Coles and Woolworths enjoying up to 80% of packaged grocery sales and between 45% and 60% of fresh grocery goods sales, with their overall market share exceeding 70%.
This degree of concentration has implications for competition in the sector: for the prices, range and quality of grocery goods available to consumers; and for the business strategies, if not survival, of other grocery retailers and businesses directly and indirectly participating in the supply chain, including primary producers.
However, supermarket power does not just affect the grocery baskets of Australian consumers. It affects many other facets of Australian society including the social fabric and sustainability of communities, employment opportunities, the environment, public health and animal welfare.
Over the last decade the power of Coles and Woolworths in the grocery supply chain, and its consequences for consumers, businesses and communities, has been the subject of sustained public inquiry and debate. Much of the focus has been on the extent to which the chains wield market power and the effects this has on competition and other commercial dynamics in the sector.
Few would disagree that regulation of competition in the sector is warranted. Yet there is scarce agreement on the extent of, most effective approaches to, and desired ends for such regulation.
Led by an interdisciplinary team of highly experienced researchers from law, business, regulation and sociology, and employing innovative theoretical and empirical methodology, the aims of this research project are to:
- Critically examine the application of theories that explain the justifications for, goals and nature of competition regulation of the retail grocery sector;
- Explain the way in which major supermarket chains modify their strategies and interactions with, and responses to, other actors in the sector, the regulatory environment and community concerns; and
- Demonstrate through case studies relating to supplier relations and site acquisitions the implications of a regulatory approach to competition that draws on a range of techniques and is informed by a sophisticated understanding of regulatory goals, processes and participants
The project is funded by the Australian Research Council over a period of four years (2015-2018).