25 June 2008

ACCC Spoils Woolworth's Plans for Karabar

| Clown Killer
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It seems that the ACCC has spoiled Woolies plans to further its strong position in the local grocery market by rejecting their bid to acquire a supermarket site in Karabar (apparently that’s somewhere in Queanbeyan). Acording to ACCC chairman Graeme Samuel:

    The ACCC had strong evidence to suggest that in the absence of the acquisition by Woolworths, the supermarket would instead be acquired by an independent operator, Supabarn, which has intentions to expand the supermarket to operate as a full-line supermarket in strong competition with Woolworths and other supermarket operators

Another Superbarn cant be a bad thing. Whether or not it will result in real price diferences in the local market is another thing.

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Yep, VicePope I see that, As I consumer, I applaud the ACCC’s action, but I do wonder how the site’s owners feel about it.

Imhotep – I’m not disagreeing, just noting that there’s a benefit here to Supabarn and a cost to the site owner and the customers.

It depends on the motivations of Woolies. If their intention was to service a market which was previously unexploited: fine.

If their intention was to prevent another player entering the market: not fine.

To all those who say that the ACCC is interfering in the operation of a free market, I say that what Woolies and Coles try to do is to prevent the operation of a free market. Woolies and Coles do not wish to operate in a free market.

They maximise their profits (and prices) in the absence of competition, as anybody who lived in a one-supermarket town will tell you.

I’m still trying to digest this. Someone had a site for a supermarket. After whatever amount of to-ing and fro-ing, Woolworths offered $X. This was more than the $Y offered by the Supabarn people. So, in a real market, Woolies would have got the site.

In comes the ACCC, either off its own bat or because the Supabarn group had a hissy. As a result, the owner of the site ends up with the choice of selling for $Y what he could have sold for $X or hanging onto the site. Of course, the Supabarn lot could probably now offer $Z (lower than either $X or $Y because Woolies is now out of the race).

Like them or lump them, Woolies seems to get people shopping. The fact that it already has a large chunk of the Queanbeyan market and was looking to expand suggests that it is succeeding. Its current performance is significantly better than Coles and, obviously, better than the regional/more expensive Supabarn.

So, if this goes ahead, the winner is Supabarn. The losers are the site owner who gets less and the shoppers who are deprived of access to the most successful supermaret chain in the business (at present, anyway), instead of which the shoppers get a smaller range of more expensive goods. As I said, I’m still trying to digest this.

Pesty said :

Now lets see if they can do anything about the cost of petrol!


Oh boy I needed that laugh.

Gees, the ACCC are really flexing their muscles, very impressive! Now lets see if they can do anything about the cost of petrol!

I don’t care who takes it over. I am just sick of everything in that shithole being out if date. If it is taken over by the koundoris family then hopefully it will be brought in the right decade.

Clown Killer7:43 am 26 Jun 08

I wouldn’t put much value on any statements made by Woolworths about what they were going to do. They’ve been at Kambah Village since Adam was a boy, and the place still looks like a rat infested sh!thole. Sepite the fact that it’s about a kilometre from my place, I still drive to Wanniassa to buy my stuff at the Superbarn.

I imagine that Superbarn have a modest price advantage because they dont have to inflate the cost of their groceries to cross-subsidise the petrol discounts.

Choice is good.

Just having a different place is worth it. supabarn carry different lines, and do things differently. I’ve never bothered going out to Karabar but maybe I will. I refuse to use the woollies at Qbn any more, it’s such crap. I always liked the supabarn at wanniassa, and in civic, and they often have oldies on the checkouts, which is rather nice. (they often card you, which at my age is also rather nice). I like being able to buy grog and groceries in the same basket, too, saves on eftpos fees and nuisence value.
I imagine they don’t let you do that in Qbn though.

Duke said :

I actually spoke to an older gentleman jockeying the register at Karabar Supabarn last week and he was very excited about the prospect of Woolies taking over.

He would be very excited… he’s the owner…

I’m a little disappointed actually… there were plans for a complete makeover and whispers of a Caltex Woolworths Service Station… whether you like it or not Woolies is one of the cheapest shops around (not counting Aldi as it’s not full-range).

About time the ACCC stood up IMO.

Any independent willing to compete against Coles and Woolworths is fine by me.

There is only a few left to keep those bastards reasonably honest

A whole new supermarket experience? good luck with that one lol. I’ve also never heard of someone coming up with a counter offer for something as being guzumped either.

Lower prices? unlikely, the supabarn in wanniassa which is about 2km from the woolworths at erindale hasn’t made any difference in prices in the some 3-4 years since they took it over, it will likely be similar in karabar which will have 4 other supermarkets within about 4 kms, not sure how that’s exactly anti-competitive either lol. The only thing I could see suparbarn doing at karabar would be buying the 3? other tenants out for the expansion, where woolies would have probably redeveloped and expanded with added tenants.

Damned either way.

The other Supabarn stores in Civic, Wanniassa and Kaleen are all owned by the Koundouris family who have also offered a small fortune but were gazumped by Woolies at the last minute. This has been well documented and discussed.

My family owns a retail outlet in the Karabar Mall and we are very excited that the Koundouris Supabarn chain may now take over and bring a whole new supermarket experience to Queanbeyan.

I actually spoke to an older gentleman jockeying the register at Karabar Supabarn last week and he was very excited about the prospect of Woolies taking over. Woolies has offered the current owners a small fortune (apparently, and more than the place is worth) with the promise of doing up the whole shopping center (which is a bit of a hole).

He was saying that Woolies is the only company with enough money to re-vamp the entire center, but I could not find out why the other Supabarn stores in Canberra, Civic and Wanniassa, could not band together to take it over.

Karabar Supabarn is looking very cheesy 80s and run down but i’ve always enjoyed going there.

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