Dismayed by The Cost of Living Crisis, Online Influencers are Questioning Major Supermarket Chains Profits

Dismayed by The Cost of Living Crisis, Online Influencers are Questioning Major Supermarket Chains Profits

Why aren’t Coles and Woolworth’s profits suffering alongside their customers personal finances amid a grinding cost of living crisis in Australia?This is a question a recent ABC News article explores, as it features a growing backlash on social media. The article introduces a TikTok video by Vivienne Mitchell, which highlights the exorbitant prices of daily necessities like razors, that went viral and amassed over 1.7 million views. This surge in attention is timely, aligning with the rising indignation aimed at major supermarkets, especially following their announcement of yearly profits.

The Highlights:

Mitchell's video emphasized the alarming cost of daily essentials. In a follow-up post, she revealed she saved a significant amount by opting for discount chains and online retailers over traditional supermarkets.

Numerous other social media posts have echoed Mitchell's sentiments, many of which advocate for boycotting the dominant supermarket chains, Coles and Woolworths.

Data from Suicide Prevention Australia recently spotlighted the skyrocketing cost of living and personal debt as primary distress causes among Australians.

The Expert Take:

Gary Mortimer, a researcher at Queensland University of Technology, contextualized the supermarkets' profits. Using Coles' $1.06 billion profit as an example, he highlighted that they had to generate $41 billion in sales to reach that figure. Mortimer likens this to a kid's lemonade stand where almost all earnings are spent on overhead costs.

However, the public's outrage isn't entirely baseless. Prices on essentials have risen while supermarket giants announced billion-dollar profits. This dissonance understandably leads to frustration, especially when the majority of the population is struggling with the cost of living.

Despite public sentiment, Mortimer believes the supermarkets' dominant market position won't be significantly affected. Recent polls still rank Woolworths and Coles as the most trusted brands in Australia.

The Supermarket Response:

Both Coles and Woolworths have acknowledged the cost of living challenges their customers face. In response, Coles recently reduced the prices of over 500 staple products, while Woolworths reduced the prices of 450 popular products, alongside weekly specials.

However, the latest data indicates Coles and Woolworths still dominate the Australian supermarket sector, holding 65.5% of the market. Other players, like Aldi, IGA, Costco, and Amazon Australia, fill smaller portions of the market pie.

Mitchell and others argue that the dominance of Coles and Woolworths equates to an entrenched duopoly, necessitating potential government intervention.

What Can Shoppers Do?

As the debate continues, practical tips are circulating online, helping Australians navigate the cost of living pressures:

  1. Opt for wholesale meat distributors, fruit barns, and independent grocery stores.
  2. Shop at local markets.
  3. Cook meals requiring less meat.
  4. Compare prices across different stores.
  5. Pool money with trusted friends for bulk buying or to cover unexpected expenses.

In a nation grappling with living costs, while the dominant supermarket chains remain largely unscathed, it's evident that change, whether through individual choice or larger systemic shifts, is necessary.

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.