...nothingAnswer No 3 Retail food industry of the Australia has been changing over recent decades, affecting consumers, suppliers and traders. These changes have increased the efficiency of different aspects of the retail food industry. Shifts in market power, change in customer’s preference and taste, change in demographic population and industry concentration in food retailing could also have an influence on further capturing the potential efficiencies in this sector. The Study conducted by Andrew J and Don G (2005) shows that retailing food industry in Australia covers roughly 46 per cent of the food industry Australian food industry was stimulated after the Second World War. The industry advanced rapidly due to the new and urgent demand for unfamiliar service rations to precise specifications. Existing technologies were reorganized and additional ones developed. Scientific wartime innovation gave rise to improved processes, products and product applications. Today the food industry is a vital component of the Australian economy. The industry makes a significant contribution to the economies through employment, business and service opportunities. Many new industries were inaugurated in the late 1980s and 1990s to take benefit of emerging market opportunities. The trends on Supermarket and grocery store market concentration The Australian Competition and Consumer Commission (2005) reported that the national grocery market shares of Woolworths, Coles and Franklins raised 40...
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...Analysis of the grocery industry Coles Supermarkets Australia October 2012 Analysis of the grocery industry Contents Glossary ..................................................................................................................................... i Executive Summary.................................................................................................................. iii 1 Introduction .................................................................................................................... 1 1.1 1.2 Project approach and objectives........................................................................................ 1 Report structure ............................................................................................................... 2 2 3 Coles – an overview ........................................................................................................ 3 Economic contribution of Coles ....................................................................................... 5 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Modelling approach .......................................................................................................... 5 Direct economic contribution ............................................................................................ 6 Indirect economic contribution ......................................................................................... 6 Total economic contribution .......
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...Subject Code ECON90015 Subject Name Examining the Australian Supermarket Industry under Porter’s Five-Force Model comprising of: 1. 2. 3. 4. 5. Internal Rivalry Entry Substitutes and Complements Supplier Power Buyer Power And their impact on the profitability and welfare of different stakeholders in the market. In the big bad world of inflation, “Cheap Cheap” and “Everyday lower prices” have been the only words of solace. For the past 3 generations, Australians have relied on the consistent comfort of competitively low prices at supermarkets. It is no wonder then, that the supermarket industry has caught the eye of everyone in the spectrum – economists, global retailers (like ALDI, Lidl, Walmart, etc.) and (inspections by) the regulators alike. Even though the market life cycle is developed, the outlook for the market looks positive, propelled by external factors population growth (1.6% YoY in 2014) and rise in average weekly earnings1. But the long-run duopoly in the market is witnessing a change in landscape with international competitors (like Aldi) swelling their market share in the subcontinent. This makes the supermarket industry in Australia interesting to analyse under Porter’s 5 Force Model Analysis. Defining the Market This analysis set geographic boundaries for the supermarket or grocery retail industry over the Australian subcontinent. Given their large population size and concentrated pockets of inhabitancy, supermarkets...
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...Assessment 2: Mini Case Analysis Introduction The Supermarkets and Grocery Stores industry in Australia is under fierce competition, and the industry revenue is expected to grow at an annualized 2.2% in the next few years, to reach $98.1 billion (IBIS 2016). A growing number of discounters have infiltrated the industry, such as ALDI, which has forced two dominated companies, Woolworths and Coles, to lower prices and increase the number of private-label products (IBIS 2016). Malaysia hypermarket retail chain Giant is also eyeing the Australian market. Given the business context in Australia, political, economic and technological are the most relevant macro environmental factors that Giant should consider. Political factor The export tariff is an important issue in trading as Australia was Malaysia’s 10th largest export destination, accounting for 3.6 percent of Malaysia’s exports (Department of the Prime Minister and Cabinet 2012). The Malaysia-Australia Free Trade Agreement (MAFTA), was signed in May 2012 and came into force on 1 January 2013, provided a high level of market access liberalization for goods into the Australian market (Department of the Prime Minister and Cabinet 2012). The implement of MAFTA is likely to lower the cost of Malaysian products, enhance the relationship between trading partners and create investment opportunities and jobs in Australia market. Furthermore, according to the report of the Economist Intelligence Unit, Australia achieved one of the...
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...AG. Originally, Tesco’s soul focus was the retail grocery market. As of February 2010, the grocery market continues to be Tesco’s largest source of revenue and it has accounted for more than 50% of Tesco’s £ 59.4 billion of sales. Further, Tesco does not limit its operation strictly to the United Kingdom. Currently, Tesco resides in 13 countries worldwide and operates 1,911 stores across Europe and Asia. The company has also expanded in the United States and has plans for an additional 320 stores in 2010 across the world. Australia’s economic and political stability and skilled labour force, provides a welcoming environment for foreign investors. With respect to the retail industry, consumer goods expenditure of 183 billion US $ in 2009 and an expected 212 billion US $ in 2010 presents significant opportunity to foreign retailers. However, risk exists as there is a limited presence of related and supporting industries for non-food products. As well, domestic rivalry remains strong in both grocery and non-food segments. The objective is to implement Tesco’s hypermarket store format in Australia while increasing the company’s global market share. Tesco’s main competitors include domestic retailers such as Woolworths and Wesfarmers Limited and as well, Costco from the United States. The entry strategy into Australia will be an International Joint Venture with Coles Supermarkets, owned by Wesfarmers. Many Coles supermarket stores will then be remodeled into Tesco branded hypermarkets...
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...of the key priorities in Business strategies for long-term success. Thus to be competitive in the market, it is crucial for Malaysia Giant Company to study the Australian business external environmental factors. The three most relevant macro environmental factors that will affect Giants discussed below. ECONOMIC FACTORS Businesses analyses economic factors and its determinants as they play a vital role in determining where an economy might move. These economic factors are not limited to economic phenomena such as tax policy, inflation and many more (Ho 2014). In February, Reserve Bank of Australia (2016) highlighted the economic growth in 2015 is a bit low on average compared to previous years. However, the Supermarket and the Grocery Market Revenue is projected to increase by 2.5% in 2015-16 (IBIS 2016) and 82% of the supermarket expected to get more earning (Delloite 2016). Since these factors affect Giant’s success, Giant should study the factors and draw strategic plans accordingly for a successful business. Firstly, since there is a fierce competition in Australian supermarket and grocery Industry, a success of a new firm will be highly impacted, as market share will be shared among competitors whilst prices dropped as, more suppliers supplying closely substitute products. For instance, Aldi entered the industry and shared the profit and market share with competitors such as Coles and Woolworths. The existence of Aldi decreases the market share for Coles and Woolworths...
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...Introduction Australian grocery industry has two modes, supermarkets and grocery stores. They supply customers various groceries and services. From the micro-economic way, Australian grocery industry earned high profit ($3.9 billion) in 2014-2015 (IBISWorld 2015, p.3). It has high competition level, concentration level, high barriers to entry, medium revenue volatility, medium capital intensity, medium regulation level, medium technology change, low industry assistance, low industry globalization (IBISWorld 2015, p.3). On a macro-economic scale, grocery industry has impacted on employment growth (wages $8.2 billion) since more job opportunities. While it is expected that grocery industry’s annual growth will decrease from 2.9% to 2.6% in 2010- 2020. That means grocery industry has reached the maturity stage in its life cycle. Market Structure Grocery industry supply customers various groceries and services, including beverages, bakery products, Cigarettes, other general merchandise, dry and packaged food, fresh fruit and vegetables, meat products, milk and other dairy products, toiletries and health products (IBISWorld 2015, p.2). According to IBISWorld (2015. P.3), four major corporations constitute the industry. Woolworths Ltd had the largest market share, which made up 40.4% in whole Australia grocery industry. Wesfarmers Limited (30.3%) got the second largest market share. While Metcash Limited and ALDI Stores Supermarkets Pty Ltd constituted 8.6% and 7.4% respectively...
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...The competition is high and the trend of industry is steady according to IBISWORLD. Over the next five years, it forecast to decline unemployment figures and remain higher than pre global crisis that affect customers purchase conditions for major household items, such as groceries. Improved low-cost private-label products have become increasingly attracting to customers especially low-income families. Consumers prefer lower priced and ‘on-special’ items, rather than higher price items. The private-label products will continue to grow and extend beyond staples like milk, flour and sugar. This will influence the industry demand over the next five years. III. Financial and Corporate...
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...online share of retail sales in the United Kingdom and the United States at 11 per cent and 8 per cent respectively. Official estimates for the online share in the United Kingdom and United States are lower at 9 and 5 per cent respectively. – Online sales in Australia are projected to grow by between 10 and 15 per cent per annum over the next three years. New electronic devices including mobile phones with internet capability are stimulating further growth in online sales. Australian consumers are attracted to online shopping due to three main factors — lower prices, convenience and a wider range of goods to choose from compared to those available from bricks and mortar retailers. Online penetration of retail sales in Australia is much higher in categories such as books, CDs, DVDs, clothing, sporting goods, electrical and electronic goods, cosmetics, and toys, but much lower for groceries. Food retailing is the sector least likely to be exposed to overseas online competition. Just over one half of the retail industry in Australia could be regarded as trade exposed, but to...
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...Metcash Originating in the 1920's as a family business, Metcash Limited (Metcash) is Australia's leading wholesale distribution and marketing company specialising in grocery, fresh produce, liquor, hardware and other fast moving consumer goods. Metcash has 4 divisions, often referred to as business pillars, each operating in a distinct wholesaling industry segment: All business models are fully owned by Metcash with the exception of Mitre10, which is 50.1% owned. IGA>D A grocery wholesaler which serves 2,500 independent retail grocery stores (including IGA branded stores) across Australia. IGA>D operates 6 major distribution centers, carrying dry, chilled and frozen grocery products. IGA>D supports independent retailers with a comprehensive range of services including: 24 hour retail system, in-store training, retail development and store equipment service to assist in expanding, refurbishing or building new sites. IGA Fresh A division of IGA>D focuses on fresh food (fruit, vegetables, meat, deli and bakery) supply to independent retailers. ALM Australian Liquor Marketers is Australia and New Zealand's leading broad range liquor wholesaler. ALM operates from 18 distribution locations across the country. Larger ‘off-premise’ customers are supplied through the main distribution system; a specialist ‘on-premise’ distribution arm, Harbottle On-Premise (HOP) supplies pubs, clubs and restaurants. ALM also provides marketing support and a range of services...
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...Supermarket and Grocery Stores industry. Economic Factors Financially, the Australian economy has had, “an annual average Gross Domestic Product (GDP) growth rate of 2.9 percent over the past 10 years,” demonstrating its resilience despite the subdued customer confidence due to the global financial crisis (Australian Food and Grocery Council 2014, p. 9). Consistent with this, the two issues below must first be considered to determine Giant’s opportunities in the market. Household Debt As a result of the simultaneous decline in interest rates and increase in property prices, Australia’s reliance on debt has enhanced. Trading Economics (2016) has forecast this trend is set to increase exponentially from its household debt of 123.10% of GDP in 2015. This trend is set to intensify the pressure on many average Australians as the income growth rate of 1.3% slowly trails behind, negatively influencing customer spending patterns (Phillips and Taylor 2015, p. 3). Unemployment Rates On the contrary, the Australian Bureau of Statistics (2016) have indicated unemployment rates have now fallen to their lowest point in over one and a half years, reporting at 5.8% in February this year. With the Australian economy growing 3% in 2015 alone despite the impeding mining industry, the ABS also forecasts an increased demand for jobs and greater potential for upcoming businesses to successfully create new job opportunities. Social Factors Furthermore, the Australian estimated resident...
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...Submission to the Competition Policy Review made by ALDI Stores 10 June 2014 1. Introduction ALDI Stores Australia welcomes the opportunity to make this submission to the Competition Policy Review (the Review). Since ALDI opened its first stores at Marrickville and Bankstown Airport in January 2001, our rapid growth has meant that an estimated 4.2 million people shop with us in an average four-week period 1. Our arrival in Australia has helped redefine the retail landscape, introducing a new and higher quality standard in private-label groceries. In focussing relentlessly on delivering exceptional quality products, matching that of the market leading brands but at prices significantly lower, ALDI provides a unique alternative to the Australian consumer. Our strong sales growth is testament to customers voting with their feet and embracing the very fact that we offer something different. Despite ALDI’s successful establishment in Australia over the last 13 years, the fact is that our expansion has been considerably slower than planned due to regulatory constraints. These take the form of rigid and overly-prescriptive land use planning and zoning rules at state and local government levels that have resulted in a chronic shortage of suitably zoned land for small format supermarkets in many built-up areas. The direct consequence of this significant barrier to expansion is that fewer Australians are able to benefit from the competition, lower prices and...
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...Submission to the Competition Policy Review made by ALDI Stores 10 June 2014 1. Introduction ALDI Stores Australia welcomes the opportunity to make this submission to the Competition Policy Review (the Review). Since ALDI opened its first stores at Marrickville and Bankstown Airport in January 2001, our rapid growth has meant that an estimated 4.2 million people shop with us in an average four-week period 1. Our arrival in Australia has helped redefine the retail landscape, introducing a new and higher quality standard in private-label groceries. In focussing relentlessly on delivering exceptional quality products, matching that of the market leading brands but at prices significantly lower, ALDI provides a unique alternative to the Australian consumer. Our strong sales growth is testament to customers voting with their feet and embracing the very fact that we offer something different. Despite ALDI’s successful establishment in Australia over the last 13 years, the fact is that our expansion has been considerably slower than planned due to regulatory constraints. These take the form of rigid and overly-prescriptive land use planning and zoning rules at state and local government levels that have resulted in a chronic shortage of suitably zoned land for small format supermarkets in many built-up areas. The direct consequence of this significant barrier to expansion is that fewer Australians are able to benefit from the competition, lower prices and...
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...effects the supermarket and grocery industry? Issue 2. What the impact of monetary and fiscal policy to Australia market, such as interest rate, foreign exchange rates, and taxation? 1. The economy of Australia is a large mixed market (‘Let’s make poverty history – for real, this time’ 2014). Appendix 1 (Hatfield-Dodds et al. 2015) shows economy of Australia is growing actively. However, under the financial crisis situation, foreign and domestic factors matter for uncertainty in Australia (Moore 2016). Gopinathan (2007, pp. 53-70) stated that ‘globalization’s effects can be seen in greater internationalization’. Globalization in this industry is low and the trend is increasing (Tonkin 2016). The wealth economic drives consumption. However, the active market means it has intense competition in Australia. For example, Woolworths, Coles, Aldi and other stores. Thus, Australia is a dynamic market for Giant to enter. It is hard to consider it as an advantage or a disadvantage. For now, low interest rates are supporting demand, the exchange rate has been adjusting to the evolving economic outlook (Reserve Bank of Australia 2016). Available data suggested that the economy had continued to grow at a slightly below-trend pace (Trading Economics). In the perspective of food price, the Australian dollar price lower and the high demands from overseas leads to monetary inflation. The Australian dollar price and loan interest rates fell, improving the Australian business sentiment condition...
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...Understanding the external environment (Industry attractiveness) 1. Identify the industry, product segments and value chain. The industry is the Australian Non-alcoholic beverage industry. Currently, Australian Beverages Ltd is the second largest competitor behind Butlers Corporation. Industry consolidation has been occurring but is not expected to continue in the future due to the relatively high market shares held by major competitors. Core operations cover processing and bottling (not retailing). Product segments include CSD (in decline stage), Diet CSD, Fruit Drinks, Milk Drinks, Energy Drinks, Sports Drinks, and Ready to drink coffee/tea. Entry into the snack food market was recently undertaken. 2. What is the current life cycle position of the industry? The Australian Non-Alcoholic Beverage Industry is at the mature stage of its life cycle. Whereas, the bottled water manufacturing industry is currently in growth stage. Major segments of the bottled water industry are still water and sparkling water. 3. What have been the key issues affecting historical and future industry growth? What was their impact or their likely impact and the overall assessment of the industry’s future growth? Key Issues influencing growth, using PESTEL Model (Analysis of industry as a whole including bottled water industry. Trends in broad industry also impact the bottled water industry) FACTOR ISSUE Historical / Future NATURE OF IMPACT (+ / = / -) Politics Import Tariffs – only affects...
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