Well done Fosters on fighting for independent retailers
Fairfax newspapers are today reporting that Fosters intervened to stop delivery of a range of their beers to Coles and Woolworths once the heard of plans for major discounting by the supermarket giants.
I am concerned that it may only be a matter of time before the supermarkets target magazines in an effort to attract shoppers. Can you imaging how shoppers would ready to Woman’s Day and New Idea priced at, say, $2.95? I hope that magazine publishers and distributors support their independent retail channel as Fosters did it its blocking action.
While loss leader pricing has been around for decades and is an important part of any retail business strategy, the current price drop craziness is designed to take business from independent retailers and this is where Australian consumers risk suffering.
Coles and Woolworths are not committed to low prices every day unless they squeeze product manufacturers, supply chain partners, employees and others to carry the financial cost so that their profits are not affected. This is where there is a considerable community cost in their much hyped discounting campaigns. I feel for the farmers and others who are carrying the cost of the milk campaign being run by Colesd and Woolworths.
These giants are trying to fundamentally change price perception forever as they know this is a game they can win – they have retail sewn up in this country. Their negotiating power is extraordinary.
The community as well as independent retailers need more suppliers like Fosters who are prepared to step in and protect local jobs.
