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Smaller supermarkets should also be required to provide unit pricing, as should other stores that sell similar items, such as supermarket-style pharmacies that sell personal care and other household items. There also needs to be a cop on the beat to enforce the rules, along with penalties for non-compliance. Too often, the unit prices are inaccurate, rendering them useless.
There are other dubious supermarket pricing practices that also need to be investigated – for example the use of price tags that make items appear to be on special when they are not, or using “was” pricing that distracts shoppers from the current prices. Shrinkflation – when package sizes are reduced, but prices stay the same – is also costing shoppers. This practice was recently called out by the Australian Bureau of Statistics as adding to inflation. In Spain, the competition regulator has labelled shrinkflation an “unfair method of competition” and requires supermarkets to inform shoppers clearly about changes to sizes and prices of products.
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We should also shine a spotlight on the expense and waste that supermarkets expend on marketing. The amounts spent on advertising, pamphlets and other types of promotion, as wells as so-called loyalty programs are obscene. Excessive marketing expenses add to supermarket costs, which are often passed on to consumers in the form of higher prices. Shoppers want lower prices, not fancy marketing.
Marketing can also be manipulative and aggressive, enticing us to spend on items that we don’t need. And supermarkets’ use of layout and product placement to influence consumer choices often leads to wasteful spending.
Finally, supermarkets need to be pushed to provide a range of essential items that are both healthy and affordable through a regulatory incentive scheme. In other markets such as energy, these schemes promote investment in energy efficiency. Without these regulatory incentives, energy firms would be encouraging us to consume as much as possible.
There is no reason the supermarkets can’t also be required to promote community interests above profits. An incentive scheme could push supermarkets to switch their sales focus on unhealthy but sometimes cheaper food, to healthy and sustainable foods. Instead of aisles of chocolate and confectionary displaying specials, we might have supermarkets competing around healthy food. Such a scheme could be extended to reduce waste, which is also costly for supermarkets.
There is no doubt that our concentrated supermarket sector is leading to more expensive groceries and high corporate profits. The challenge for the upcoming parliamentary inquiries will be to pursue reforms that make a difference to everyday shoppers.
Gerard Brody is a consumer advocate, and chairperson of the Consumers’ Federation of Australia.
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