Brian Rosen’s Post

Should we level the playing field in the wine and spirits market? For decades, big retail chains have dominated with unique pricing deals and end of the year rebates. These advantages let them slash prices for consumers, but they leave small and independent stores struggling to compete. Now, the FTC is gearing up to file a lawsuit against Southern Glazer’s Wine and Spirits over their pricing practices. This raises a crucial question: Should we fight for a fairer marketplace where small businesses can thrive alongside giants?

The Competition and Markets Authority (CMA) has called on grocers to prioritise accurate pricing following a review of the way in-store prices are displayed. The review, which looked at the price marking practices of 139 grocery stores, assessed whether prices were “clear, accurate and matched the price people were charged at the till”, and the assessment included supermarket chains, symbol convenience stores, variety stores and independent food stores. https://lnkd.in/eu_p3c2a

The FTC’s suit against Pepsi for violation of the Robinson-Patman Act is a noteworthy occurrence in the world of antitrust economics. A successful claim (or defense) will likely be an intensive, data-driven process. The discriminatory pricing alleged by the FTC must be shown to have: (i) resulted in lower prices at the “preferred” retailer, and (ii) diverted sales from the disfavored retailer (e.g., family-owned grocery stores) to the “preferred” retailer. But what is the relevant price? What sales were diverted? The answers to questions such as these will hinge on rigorous testing of the data. This is definitely a story to keep tabs on. #WMMBA

If you read this article, you can understand why Aldi and Trader Joe's are so successful as well. They have been doing what Lidl is doing for more than a decade and have better sales per square foot to show for it.

The price of bananas, a dozen eggs or a loaf of bread at neighborhood supermarkets is set in part by a not-so-subtle process of spying. Grocery-store operators scrutinize the websites and promotions of rivals and send managers to walk through competitors’ stores to help establish what shoppers will pay for items. Companies commonly use rivals’ prices as a benchmark in setting their own. However, these tactics have gained attention from government antitrust lawyers seeking to block a $20 billion merger between Kroger and Albertsons, the respective largest and second-largest U.S. supermarket chains by sales. Federal Trade Commission attorneys argued that Kroger won’t have the same incentive to lower prices in its stores without Albertsons. Price checks can provide a ceiling for what grocers charge shoppers, an argument made by lawyers at the FTC and state attorneys general to emphasize the importance of competition. Lawyers for Kroger said the purchase of Albertsons gives the company enough scale to match or beat prices from Walmart, the world’s largest retailer, and other low-price grocers. Kroger and Albertsons also said they price check against a number of different competitors in a given area, including Walmart, Target and Amazon.com’s Whole Foods Market, not just each other.   A federal judge is expected to decide whether to block the deal in the coming weeks. Todd Broderick, an Albertsons executive who oversees Safeway stores in Denver, routinely monitors one of his company’s top rivals in the area. In visits to Kroger-owned King Soopers locations, he checks how busy and clean the stores are and how prices compare to those at Safeway. Broderick and his colleagues also pore over print advertisements that Kroger mails to local shoppers. “If our price is lower, we’d say we won,” he said in a federal courtroom in Portland, Ore., in September. Food prices in America are under heavy scrutiny as consumers now spend more of their income on food than they have in decades. Consumer advocates and government officials have blamed corporate greed for food-price inflation. It has been a hot issue on the presidential campaign trail, with Republican Donald Trump blaming his Democratic opponent, Kamala Harris, for fueling inflation while serving as vice president. Harris has called for banning price gouging in food and groceries.  Industry executives have said a number of factors go into the price of food, from surging labor costs to commodity price swings. Large grocery companies, which typically operate with razor-thin margins, use their leverage with suppliers to push down prices and get more shoppers through their doors. Competitors then have to adjust their prices to avoid being labeled as the more expensive store in town.

COMMENCEMENT OF THE ACCC’S PUBLIC SUPERMARKET HEARINGS - LIVESTREAM Australian shoppers deserve a fair deal at the supermarket checkout. The commencement of the ACCC’s Supermarket Inquiry public hearings is an important milestone to getting a fair go for Australian families and farmers. Over the next two weeks, the ACCC will examine senior executives of Coles, Woolworths, Aldi and Metcash, along with a range of suppliers and key consumer and industry stakeholders. Directing the ACCC to conduct a wide ranging Supermarket inquiry is all part of the Government’s supermarket competition policy agenda which includes: - Regulating a mandatory Food and Grocery Code by the end of the year; - fighting against shrinkflation through strengthening of the Unit Pricing Code; - providing the ACCC with $30 million of additional enforcement funding; - funding CHOICE to provide Australians with information on where to get the best deal at the checkout; and - ensuring the ACCC is notified of every supermarket merger under a strengthened merger regime. Hearing schedule: 11 and 12 November – Aldi 14 and 15 November – Metcash 18 and 19 November – Woolworths 21 and 22 November – Coles. A link to the live stream and more information on the hearings can be accessed on the ACCC’s website (below)

Distributors: what are the lessons behind this bogus Govt lawsuit (with a few days left in the Biden administration)? 1.       Walmart (WMT) gets the lowest, “dead-net” prices because: a.       They buy full truckloads going to one cross-docking DC b.      All transactional activity and payments are automated/electronic c.       There are no rep or extra freebie friction costs involved. d.      Pepsi bottling plants get real-time replenishment demand, so they plan their JIT bottling volumes to match. This lowers total bottling costs. e. In an anonymous survey of WMT's top suppliers (c. 2000), they all admitted that WMT: was their biggest customer; gets the lowest price; and is the most net-profitable account. Total cost-to-serve dropped more than the price! 2.       If any other retailer wants to buy the same way, then they will get the same deal. 3.       WMT’s cross-docking DCs plus daily truckloads going to every store allows WMT to: a.       Have 99% fill-rates at “everyday low prices” (with no excess stock) on the fastest moving 7000 SKUs in their stores. b.      These 7000 SKUs (including Pepsi, Coke and Sam’s Cola) are the core of WMT’s value proposition. 4.       McDonald’s has a similar total replenishment system with their same distributors for up to 68+ years.             Questions: 1.       What win-win, total-replenishment-system solutions are you innovatively evolving with your biggest suppliers and your biggest customers? 2.       Or, are you still trying to buy low and sell high on a transactional basis with all parties. 

The Competition and Markets Authority (CMA) has reviewed the way a range of grocery retailers displayed their prices in-store to assess whether they were clear, accurate and matched the price people were charged at the till. As a result of these findings, the CMA, in conjunction with Trading Standards, has published compliance materials aimed at helping grocery retailers understand what they need to do to comply with the law. Read more here:  https://lnkd.in/gNR34dT7 #FMCG #GroceryIndustry #Pricing

Roisin Currie, chief executive of Greggs, has said the company is trying to limit price increases to “pennies and protect entry-level prices”, after confirming an increase in the price of some menu items, including sausage rolls. It comes after the food-to-go retailer reported that its company-managed shop like-for-like sales increased 2.5% for its fourth quarter, reflecting the “more subdued high street footfall”, as total full-year sales topped £2bn. 👉 For the full version of this story and to read it first sign up to the Propel email newsletter for free: https://lnkd.in/eyy_THzR

The CMA has been carrying out on-site inspections at 139 grocery stores looking specifically at how each display pricing matching prices on display with those charged at the till with some interesting results... As a result of these findings, the CMA, in conjunction with Trading Standards, has today published compliance materials aimed at helping grocery retailers understand what they need to do to comply with the law. The CMA is also calling on the relevant trade associations to share these compliance materials with their members. This has taken me back to my days working at a number of trading standards services where pricing as well as a host of other compliance checks were carried out. The materials produced here look great being clear and easy to understand which will help in particular those independent retailers understand what they need to do to comply with consumer law. https://lnkd.in/et9TQTUF #nostalgia #reminiscing #businesssupport #businessguidance