fabulous post, and very interesting reading, many thanks for the time and effort you have both put in.

Just to add my fourpenneth !!

1 person said there weekly shop was 30 - 40 quid !! fpmsl, they must be annorexic.

We have never shopped at IGA, and that is expensive for spuds , we get a 50 kilo bag here for $9.99 !! + 3 DOZEN free range eggs for $5.99

I think the only way you could statisticlly compare, is to input a price by product comparison across all Oz and Uk stores.

I know my Missus has and always will do, buy her frozens from one place, vegies from another and meats from another...

Dont forget to add in the price of MILK, ie in Oz we have to get off our fat arses, and travel 15k to get a bottle, that surely would distort the figures lol

Steve

Agreee, agree, agree.

It does make you wonder who is getting paid off to allow this to continue.

Tesco would really have a field day here and yet for some reason they are not entering the market.

Suspicious?

I think that a lot of people also question this one..

Funnily enough, we were wondering this morning just why Tescos are not players here1

They are opening new outlets all over Asia and the eastern European countries: I would have thought that Oz would have been a given. Many of the markets they are moving in to are far smaller than the 20m here. I reckon they would carve the local chains up and spit them out for breakfast.

The acceptance in Oz of uncompetitive marketing, corruption in state and local government etc is nothing short of pathological. You hear the phrase " the lucky country" so often it grates; so often it's used as an excuse to just carry on as before, digging the iron and uranium out of the ground and no doubt it'll last forever. The problem is, it won't - and the rest of the world has accelerated away. Sounds like the UK in the seventies, does it not?

(Rant mode off)

Interestingly Tesco is not exactly the champion that many people would like to think. They are not an ethical company and were left off the list of such socially responsible companies. Since they also now control over 30% of the market share and Asda's parent company Walmart have now asked for an enquiry into the market dominance it does make you wonder if the UK is the same as Australia and heading toward a few horse race.

Why not in Australia then...maybe the existing market would be hard to break especially when you consider the population to land ratio and the number of locations you would need. The existing players probably benefited from the cheap property prices for existing set up costs whereas commerical property has rocketed. Frankly - I doubt we are seen as a viable market really.

More competition would be nice for sure!

I suppose one will ever know what goes on, in the higher echelons of decision makers, and their machinations. However just to put my two bobs worth in, and also wondering if this kind of err cronisim is worse here than the UK. My first employer here was the Gas and Fuel corp of Victoria. A few choice gas rigs of the south coast, and gas supply all over Victoria. Profit margin a cool 1 million bucks per day, for the Victorian government coffers, and thats circa 10 years ago. I often wondered especially at the time, when I was losing my job, to "private enterprise" where has that money gone ? I think the sale price was circa 1,000 million dollars.

The contents of this thread are not making me one bit happy.

Spot on.

Entry into the market in terms of distribution and set up costs far exceed potential revenue payback given maximum consumer and market share potential.

Shame. There is definitely a cartel going on over here

Interesting you should use Walmart as the injured party as an example: they are probably the most hated company in the US (excluding Micro$oft, but that's a given <g>) despite their low prices. Their market tactics border on those of the godfathers.

Like the point but I'm not so sure how valid an argument it is. Here in Perth land prices 25 minutes from the CBD are still low. Tescos could build a huge hypermarket and if the prices, choice and quality were as low as the UK, people would travel for miles to do a huge shop.

The point made earlier about ethics is interesting and certainly one dear to my heart. The trouble is, is that for the type of consumers who are hit hardest by the Coles/Woolworths etc cartel, ethical trading issues are a luxury which just can't be considered. They just don't want to be ripped off by supermarkets (I'm currently in that income bracket). Plus I'm not sure how ethical the Aussie operators are - the kind of corruption which people have alluded to here and in other threads suggest that ethics are a long way from the companies' minds.

Sorry - one other thing which it would be interesting to hear views on....

Perth has (inspite of the odd rush hour jam) a fabulously smooth running transport system - especially compared to the UK. Now what do you reckon, would a 25 minute travel radius cover a quarter of Perth's population?

If so, that's about 400 000 people within a 25 minute drive of a hypothetical Tescos. What would a threshold population be in the UK? Surely less than that - I think about the small towns that I know - they all seem to have a Tescos even with populations of around 100 000.

Does anyone know if there are legislative reasons which prevents foreign operators? But then again Aldi is present in the East isn't it?

Large organisations are no different to politics in that they have to be seen to be doing the right thing but at the end of the day they are there to make a profit and bring in the punters / consumers.

In terms of why Tesco's or any other lge supermarket for that matter, hasn't entered the Aussie market is for various reasons.

Any newcomer would have to market their product/services to gain market share from Coles/Woolworths. They would either have to diffrientiate their product/services......or sell an undiffrientiated product. Sell something different and the consumers might not want it. To assess this you need to understand the Aussie market. Are Aussie consumers happy to change what they've always bought or would they want to shop differently? The alternative is to provide the Aussie consumer with what they are used to....which in essence would mean the new company would be the same as the two big players.

Selling something different to Woolies or Coles might make some consumers defect but would that be enough to cover entry costs?

Selling something the same as Woolies or Coles might make some consumers defect but would that be enough to cover entry costs?

Either of these strategies wouldn't necessarily draw consumers away from the big players and indeed Tesco's would just become another party to join the cartel.

Then there's entry costs. Australia is a vast country with few people so divide these consumers by three big players ....and would the market share be worth "writing home about?".

Tesco's would need a substantial foothold in the market to be able to
1. Market their product
2. Warehouse their product
3. Distribute their product
4. Work with suppliers, some of whom will be forced via contract rites not to work with them as they are with Wollies/Coles

Marketing, Distribution,Warehousing and entry point learning curve costs would be astronomical. Then there is the supply chain which is already established for Coles/Woolies via long term partnerships.

Tesco's may be great in UK but operating in Australia with different products/climates/supplier relationships etc, etc is a totally different ball game. This would cost millions and millions and even with a very large market share it would take years to recover the cost.

At the end of the day there are only so many consumers in Aus to share within the market. I guess the likes of Tesco's have worked out there aint enough people to cover their costs to entry just yet. But never say never.

An alternative would be a joint venture....but I can't see Woollies or Coles being interested as there'd be nothing in it for them. Why would they want to help someone with their market expertise?

Of course the Aussie government could potentially sponsor someone like Tesco's if they wished, if say for example they wanted to introduce [or help introduce]a third party to make it a consumer market. But then the Aussie government are no doubt sponsored by these very large profitable companies currently operating in Aus.....so why do anything to rock the current sponsorship boat

So....money talks....and it looks like the ordinary Joe has to like it or lump it till the big guys can see some money in it m8

Can I just ask - if there is some sort of conspiracy to not allow any competition or any other company to start up in the grocery market, how did Aldi open a heap of stores here 12 -18 months ago?

Wow, detailed answer - are you submitting this as an essay?

Tescos are still looking at other overseas markets - presumably with all the difficulties that Australia would pose (i.e. established supplier chains, established competition, logistical issues.) So I suppose the key point is what is different in Australia? Australia is a massive country but most of its population is highly concentrated - surely a retailer's dream?

Surely they'd only differentiate on price - this should be enough to attract customers. Can't speak for the Eastern States but here in Perth with such a huge UK population, they wouldn't need to do much initial marketing!!
But.....if they are unwilling to enter as they don't see price differentiation as being viable, maybe the Aussie prices are good value - maybe goods cannot be sold at a cheaper price??

Your point about Coles etc funding the key powers in govt is, I like to think, the key. I know that this goes on in the UK but where is the body in Australia which looks out for this and says enough is enough?

No one is saying there is a conspiracy to not allow any competition.

What is being said is that it has to be a viable option for another to enter the market.... and so far the theory is it maybe isn't.

Aldi opened as they decided in a differentiated market. Their success remains to be seen.

Sorry, I thought Rog & NSKS etc were all commenting about it being like the mafia & who was getting paid off not to allow any other companies a foot in the door.

I agree, I think most companies would baulk at huge set-up costs for a very small market share. Aldi obviously didnt, but then they arent quite the norm .