November 30, 2011
“Shed not a tear for the big brands; Australia is a line item in their annual report, and not a big one at that.”
It’s a funny thing, choice. Too much of it and we complain of being bamboozled. Too little and we rail against those who dare deny it to us. Judging by the outrage that has greeted supermarkets sweeping away well-known brands in favour of their own, one could be forgiven for thinking some heinous human rights abuses are being committed daily in their aisles.
But the reality is they are not: shoppers are merely reaping what they sow.
Years of searching for the lowest price, best buy and sharpest deal has taught us the price of everything and the value of nothing.
Surely then it should come as no surprise that we now find ourselves facing a future where half of the products that will be on the shelves of our two main supermarkets, Coles and Woolworths, might be private label, at the expense of the brands that we profess to love so dearly.
The supermarkets have successfully played to base and selfish interests – they know we want the best possible price (and offer it on some goods in order to lure us into buying other more expensive ones) and that we place a high value on convenience.
The cash-rich, time-poor shopper is manna from heaven for the supermarkets who have steadily wooed us away from the shops on the high street to shopping malls, often sucking the life out of the town centre in the process. A few years ago, the protests about that issue were every bit as vocal as the ones we are now witnessing about the growth of private label brands, and yet still the march of the mall continues largely unchecked.
Our memories appear to be as long as our shopping lists. We also seem prepared to overlook the fact that many of the brands under threat from the supermarkets’ own products are owned by global multinational companies that have used their economic might to muscle out local Australian-owned competitors.
Of research company Nielsen’s top 25 brands, only four – Bega, Bulla, Quilton and Weet-Bix – are Australian-owned. The top 10 advertisers of foods – all of them foreign-owned – will spend an estimated $190 million this year, with the aim of dominating their category at the expense of others.
In the brave new world envisaged by Coles and Woolworths there will be room only for a leading household brand and a price-fighting number two and then the private label products. The future of the smaller local brand that is unable to offer ”trade support” – that is, advertising in Coles’ or Woolworths’ catalogues or underwriting in-store deals – looks bleak indeed.
And all of this is a surprise? This has been happening for 15 years in Britain, where around half of the products sold in leading supermarkets are their own. The big brands can’t say they hadn’t seen it coming. And yet the best many can do by way of a response has been to ”innovate”. I use quote marks because their definition of innovation is loose at best; sometimes it can be a genuinely new product but more often it is a short-lived variant of an existing brand that gives a brief fillip to sales only to quietly disappear. Shed not a tear for the big brands; Australia is a line item in their annual report, and not a big one at that.
But what of the Australian-owned and operated brands inevitably caught in the crusher – squeezed between Coles and Woolworths on the one hand and the multinationals on the other?
For one thing, if the fizzle that is the Buy Australia campaign is anything to go by, they can’t count on our support. Ask anyone if they would go out of their way to buy Australian products and invariably they say yes. Who wouldn’t? That unwavering support for all things Australian soon evaporates when the shopper is asked, as is invariably the case, to pay more for the Australian product than the imported rival. So much for our oft-vaunted loyalty.
As for the government? The Industry Minister, Kim Carr, is playing the white knight, promising to pass on his concerns about the rising power of the supermarket chains to the Australian Competition and Consumer Commission. Sound familiar? It’s only three years since the competition regulator sallied forth and collected evidence on much the same subject. And here we are still talking about it.
Meanwhile, the tills are still ringing and we continue to flock to the big two because they are giving us what we want, not what we say we want.
Until shoppers start putting their trolleys where their mouths are, they will continue to get the companies and the brands that they deserve.