Coles and Woolworths: The deadly duopoly

Jun 19, 2023
POV (point of view) of person pushing in motion blur of shopping trolly rushing in supermarket ally full with food merchandise.

Bob Katter is not known for his searching socio-economic analysis, but when he rails in Parliament that it is an indictment of Australia’s banana republic economy that Coles and Woolworths have long toppled manufacturing companies as the largest private sector employers in Australia, it is hard to argue with his logic.

Australia has the veneer of a developed capitalist economy: but scratch the surface, and the hegemony of Coles and Woolworths and a handful of largely foreign owned mining multinationals points to a classic case study of an underdeveloped economy.

The economic cost of the grocery duopoly in a cost-of-living crisis is one thing; but the role these giants play as poster children for illuminating the backward state of the Australian economy is crystal clear.

Walk into any Coles or Woolworths store and beyond the mouth-watering profits that are lining shareholder pockets and stoking inflation lies a deeper issue: What is the tally of these behemoths on the soul and psyche of the nation? Also, what cost to the balanced development of the economy does their hegemony reveal?

If the scales drop as you circle a Coles or Woolworths store, the first thing you see is the abundance of young staff. Talk to them and it becomes clear most of these are not students filling in hours between university assignments. They are bright and vigorous full time staff dependent on what Coles and Woolworths derisively offer as a career path. The stifled career opportunities and the lifetime of drudgery for the bulk of staff quickly become apparent as you talk to those on the counter and filling shelves.

Next thing to note, is the lousy pay. Twenty-three dollars an hour for most of the staff is the going rate. In whispers, staff will tell you that last year the rate was lifted by a handful of cents―not dollars. No wonder profits are booming. To add insult to injury, both Coles and Woolworths have engaged in the underpayment scandal that has engulfed corporate Australia. To enquiries about whether there are signs in the tearooms and open robust conversations about the virtue of membership of a union one is met with incredulity.

It’s not like a Walmart or Amazon in the US where union membership is barred, but it’s not far off. You can join a union, but the shoppies (SDA) union has for decades been a byword for passivity. Union delegates make a yearly visit to a store, but they focus not on career opportunities, job satisfaction, levels of work intensity and managerial behaviour, working conditions and pay, but on recruiting new members. The SDA has always cultivated a coterie of right-wing federal ALP parliamentarians. The SDA, operating through surrogates, is adept at pulling strings when Labor leaders are being made and broken, whilst their representatives on the front-line revel in talking to store managers and cutting sweetheart deals.

Then there is the use of technology in Coles and Woolworths. It’s there and impressive. But it is mobilised to intensify output per hour and boost productivity with all the gains going in increased profits.

Online personal shopping has opened a rich seam of super profits gained at the expense of higher rates of intensity of labour. Armed with a trolley and a sophisticated handheld device that issues a notification saying how many items must be picked in a ridiculously short time workers can be seen almost running around the store like contemporary inheritors of the mantle of what David Ireland termed “unknown industrial prisoners”. Time and motion experts have taken account of every human movement to ensure maximum productivity as bodies fill order bags.

Coles and Woolworths control two-thirds of the grocery market with Aldi tailing behind with ten per cent. A new independent rapid online grocery business was set up with the aim of challenging Coles and Woolworths. Before long, bankruptcy loomed―and the business known as MilkRun was sold to Woolworths at a fire sale price. The only tangible result was that Woolworths pinched some ideas off their defeated competitor, to speed up home grocery deliveries. Woolworths are silent on how the underpaid and overextended workers on pedal bikes and scooters bear the burden of this express service.

All this raises the question of what is to be done. Australia is replete with critical minerals essential for the coming green economy. These key minerals could form the bedrock of a local sustainable and independent industrial base. Instead of which, they are likely to be loaded into bulk carriers and shipped offshore. US companies are trawling through Australia searching for critical mineral acquisitions. The grand strategy is to defeat the Chinese in the race to process rare minerals needed for the net zero clean energy economy. In yet another field Australia’s sovereign interests will be trashed to suit the aims of the global hegemon.

For a moment during the Whitlam years, there was the semblance of a national economic plan to give Australian kids the range of jobs open to their peers in metropolitan centres. Visionary politicians dreamed of Australia getting off the sheep’s back and harnessing the energy and intellect of citizens to produce a rich and independent diversified economy with a thriving manufacturing sector. But the Kerr coup killed stone dead the hope of Australia being more than a branch office of largely US multinationals who did their production and research and development elsewhere. Now it’s not the sheep’s back but mining ore and filling shopping bags that are the hallmark of the Australian economy.

Cheerleaders for Aukus declare it will herald a new economy based on highly skilled jobs. Adelaide and other places are hyped as future hi-tech centres. The reality will be different. Apart from unleashing an arms race, Australia will continue its inglorious history of being a branch of foreign manufacturers who will―as Paul Keating has noted―be the prime beneficiaries of state expenditure wasted on throwing toothpicks at China.

Promotion of export based national champions along the line of South Korea’s modernisation is needed. As the axis of the world economy moves towards the BRIC countries, new markets for nimble and innovative producers will open. Truly we will live in a dark age if local public and private capital investment fail to grasp the nettle and strive for an independent and clever country.

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