Grocery prices - UK vs Australia from our recent reccie

[Peach]

I'm referring to the culture which appears endemic in Aus retail/service whereby just by 'turning up' you can expect a lavish lifestyle. It is on display ALL the time: cafes closing at 5pm (or 3pm weekends), businesses closing completely between Dec 24 and late jan, tradies charging through the nose for work that doesn't require much skill, shops selling stuff that is more than double what you might pay for the same item delivered from an internet retailer, Gerry Harvey trying to reduce the effects of internet competition, bakeries charging up to $6 for a loaf of bread, milk bars charging $10 for a can of coke and a pie, dentists frisking you for credit cards on the way out, pharmacists charging insane amounts for paracetamol re-branded as 'Bollox-amol'.....I could go on...

 

So what you're saying is everybody should work harder and get less? Doesn't sound like a great future - would be much happier to pay more and everyone be comfortable than worry if my job was next for downsizing. :wubclub:

[Harpodom]

So what you're saying is everybody should work harder and get less? Doesn't sound like a great future - would be much happier to pay more and everyone be comfortable than worry if my job was next for downsizing. :wubclub:

 

No, businesses/services/retailers need to be recession proof

[Skani]

I'm referring to the culture which appears endemic in Aus retail/service whereby just by 'turning up' you can expect a lavish lifestyle.

 

I don't know any businesses in retail/service which enjoy a lavish lifestyle - but then I don't live in Sydney or Melbourne, so it might be different there. In fact most of the business owners I know work very long hours - much longer than salaried employees - for not much financial reward.

 

What about the culture endemic in the EU countries of giving 40% of the EU budget to farmers - often rich farmers - to subsidise inefficient, soil-destructive and water-wasteful farming practices?

I don't know of any businesses in Australia which enjoy a lavish lifestyle based on 40% subsidy from the government.

[Harpodom]

Of course not, because you live in the utopian bubble that is Tasmania, where every negative aspect of Australian life can be dismissed because 'its not like that that where I live' and where only good stuff ever happens...

 

 

I don't know any businesses in retail/service which enjoy a lavish lifestyle - but then I don't live in Sydney or Melbourne, so it might be different there. In fact most of the business owners I know work very long hours - much longer than salaried employees - for not much financial reward.

 

What about the culture endemic in the EU countries of giving 40% of the EU budget to farmers - often rich farmers - to subsidise inefficient, soil-destructive and water-wasteful farming practices?

I don't know of any businesses in Australia which enjoy a lavish lifestyle based on 40% subsidy from the government.

[Guest Ptp113]

Of course not, because you live in the utopian bubble that is Tasmania, where every negative aspect of Australian life can be dismissed because 'its not like that that where I live' and where only good stuff ever happens...

 

​Compared to the dump you live in?

[Guest]

Nor do I, I think its one of those myths about Aus that the majority happily perpetuate, like the one about Aussies cooking everything from scratch

 

Maybe then they are just choices I made, that were easier to do so where I live in Australia, compared to where I lived in Scotland. I have bakers, greengrocers, fishmongers etc. walking distance from where I live here and they have long since ceased to exist in anywhere that I am familiar with in the UK. There are many places I wouldn't choose to live in Perth simply because there is little more than a supermarket - that's MY choice and one, anyone else can choose to make or not. I am onto my fourth suburb in Perth and each one had a local shopping centre with everything I needed. I am not obsessive, I buy what is cheaper and equivilant quality in Woolworths but I have friends who do no shopping at all in Woolworth or Coles by principle.

 

As for cooking everything from scratch, this is something I have always tried to do, but I'm human and after a hard day at work with nothing in the pantry the lure of a ready meal from M&S (or even Tesco's finest range) would beckon. The woeful quality of ready meals here means it is no longer alluring!

 

I tried extremely hard to only 'buy local' in Scotland and support independent producers it was almost impossible, I have found it very easy here and will miss that. I can't believe how passionately I have defending food shopping in Australia in this thread - at last something I like better here :laugh:

[simmo]

I was out and about in Kent yesterday and a saw quite a few signs for "Farm Shops" is this a new fangled thing thats been copied from aussie soaps like home and away or have they been there all along? Seriously though the rise of the "out of town" supermarkets is not going to stop. The village stores need to adapt of sink without trace, its the natural selection of the retail world. To blame supermarket users for this is nonsense.

I have a friend who owns a children's clothes shop in our local village and she has just had a huge extension put on the back of her shop for extra stock and a packaging area for on line sales.

[Guest]

I was out and about in Kent yesterday and a saw quite a few signs for "Farm Shops" is this a new fangled thing thats been copied from aussie soaps like home and away or have they been there all along? Seriously though the rise of the "out of town" supermarkets is not going to stop. The village stores need to adapt of sink without trace, its the natural selection of the retail world. To blame supermarket users for this is nonsense.

I have a friend who owns a children's clothes shop in our local village and she has just had a huge extension put on the back of her shop for extra stock and a packaging area for on line sales.

 

Definitely there all along, I lived in Kent between 1988-1991 and bought my produce from a farm shop but I think they are probably expanding. Diversification is the name of the game, farmers can no longer survive by simply selling the produce they grow wholesale.

 

Don't start me on on-line shopping, that's a whole different thread

[paul1977]

I don't know any businesses in retail/service which enjoy a lavish lifestyle - but then I don't live in Sydney or Melbourne, so it might be different there. In fact most of the business owners I know work very long hours - much longer than salaried employees - for not much financial reward.

 

What about the culture endemic in the EU countries of giving 40% of the EU budget to farmers - often rich farmers - to subsidise inefficient, soil-destructive and water-wasteful farming practices?

I don't know of any businesses in Australia which enjoy a lavish lifestyle based on 40% subsidy from the government.

Yawn..!!!!!

[Harpodom]

​Compared to the dump you live in?

Exsqueeze me?

 

I happen to live in a very nice area. At least I don't live in the Aus version of Milton Keynes

[Paul1Perth]

There shut when I get home from work. In WA shopping centres close at 5. And there are 20 years behind UK supermarkets in terms of choice. Coles and woolworths remind my of going back in time when we used to go to kwik save after school.

 

We have an IGA across the road from where we live. It's open at 7:00am and closes at 8:00pm. Most IGA shops are like this. Shops at big shopping centres are open late on Thursday night.

 

On the fruit and veg front I find the choice, quality and price pretty decent really. I love plums and peaches, they have been spectacular this year, seedless grapes have been available for the 20 years we have been here. How much do we pay for a chocolate bar and then complain about how much fruit is?

[Guest Ptp113]

Exsqueeze me?

 

I happen to live in a very nice area. At least I don't live in the Aus version of Milton Keynes

 

​You obviously haven't been here.

Edited April 29, 2013 by homewardbound588

[Harpodom]

​You obviously haven't been here.

 

Long may it stay that way!

[Goochie]

I always try and avoid threads like this but this one has wound me up a bit!

 

I really wish people would stop trying to compare Australia with Europe! Yes I know you're talking about the UK specifically but the whole reason things are cheaper there is that there are millions more people in Europe.

 

In these days of mass manufacture (in China, probably) the cost of the product itself is quite small compared to the cost of shipping it around the world and getting it to the shop.

 

If your household appliance of choice is made in China and shipped to Europe, the manufacturer will be sending thousands of them there to cater for the millions of customers. They will be shipping more products, more often so the cost of getting the product to your highstreet is tiny.

 

Meanwhile, the same manufacturer is making products for customers in Perth. An isolated city with a tiny population in a country with a small population. He's not going to ship anywhere near as many products so his shipping costs will be higher. The cost of handling that smaller shipment at all points will be higher and spread over fewer units - So the cost goes up.

 

Its basic rules of supply and demand. If you want things to get cheaper in Australia you'll have to buy more (fancy taking 3000 washing machines home?).

 

Some people really are stupidly blinkered when it comes to thinking about WHY something costs more. Its all too easy to say that retailers rip people off in Australia compared to the UK.

[northshorepom]

That's not why things are expensive though Goochie. Shipping costs are a tiny fraction of the cost base of retailed goods

 

It is what the retail industry (particularly here) would like you to believe though. And a few apologists for it

 

The truth in any market is that price is only indirectly related to cost. So arguments for higher or lower prices based on input costs are missing the point. Ceteris parabus, suppliers in any market charge what they can for a product in order to maximise revenue. What it actually costs them impacts on their bottom line, not directly on what you pay. Micro economics 101

 

Your argument about shipping costs is nothing do with "basic rules of supply and demand" BTW. Those (the BRs of S&D) are how prices are fixed in a free market, all other things being equal - nothing to do with input costs

[Guest chris955]

The problem with that theory is that as recently as 10 years ago Australia was considerably cheaper overall than the UK. If it was just a case of the economics of scale it surely would always have been the case ? Before anyone brings this up this isnt an exchange rate issue. Over the last 10 yearsor so Australia has become a much more expensive place to live and it isnt as if I am alone voice here. Just look at the incredible rises in utilities as an example.

 

I always try and avoid threads like this but this one has wound me up a bit!

 

I really wish people would stop trying to compare Australia with Europe! Yes I know you're talking about the UK specifically but the whole reason things are cheaper there is that there are millions more people in Europe.

 

In these days of mass manufacture (in China, probably) the cost of the product itself is quite small compared to the cost of shipping it around the world and getting it to the shop.

 

If your household appliance of choice is made in China and shipped to Europe, the manufacturer will be sending thousands of them there to cater for the millions of customers. They will be shipping more products, more often so the cost of getting the product to your highstreet is tiny.

 

Meanwhile, the same manufacturer is making products for customers in Perth. An isolated city with a tiny population in a country with a small population. He's not going to ship anywhere near as many products so his shipping costs will be higher. The cost of handling that smaller shipment at all points will be higher and spread over fewer units - So the cost goes up.

 

Its basic rules of supply and demand. If you want things to get cheaper in Australia you'll have to buy more (fancy taking 3000 washing machines home?).

 

Some people really are stupidly blinkered when it comes to thinking about WHY something costs more. Its all too easy to say that retailers rip people off in Australia compared to the UK.

[Guest chris955]

Yes I agree with that. What do you personally feel is the reason behind the very obvious rise in costs across the board in the last decade or so ?

 

​

That's not why things are expensive though Goochie. Shipping costs are a tiny fraction of the cost base of retailed goods

 

It is what the retail industry (particularly here) would like you to believe though. And a few apologists for it

 

The truth in any market is that price is only indirectly related to cost. So arguments for higher or lower prices based on input costs are missing the point. Ceteris parabus, suppliers in any market charge what they can for a product in order to maximise revenue. What it actually costs them impacts on their bottom line, not directly on what you pay. Micro economics 101

 

Your argument about shipping costs is nothing do with "basic rules of supply and demand" BTW. Those (the BRs of S&D) are how prices are fixed in a free market, all other things being equal - nothing to do with input costs

[Peach]

The problem with that theory is that as recently as 10 years ago Australia was considerably cheaper overall than the UK. If it was just a case of the economics of scale it surely would always have been the case ? Before anyone brings this up this isnt an exchange rate issue. Over the last 10 yearsor so Australia has become a much more expensive place to live and it isnt as if I am alone voice here. Just look at the incredible rises in utilities as an example.

 

Over the same period, the UK became an expensive place to live too: http://www.castlecover.co.uk/historic-home-utility-prices/

[Guest guest74886]

​Typical pom laziness! Luckily there are many poms in Blighty who still shop outside supercraps, and they are doing well if they have a quality product.

 

I have found that the so called farmers markets here are organised by an entrepreneur who charges a bomb for pitches so produce is no cheaper than supermarkets or if it is it's like London markets, buy it and eat it same day because it's already going over and these markets are not regular twice a week jobs it's every other week at best so there is no chance of establishing continuity as there is in Europe.

On the odd occasions when I stop at rural market stalls the food is all poor quality because all the good stuff goes to the supermarkets.

[northshorepom]

I can't comment on increases over time in Oz - not been here long enough

 

There are a number of issues surrounding retail here....the small size of the market is one of them, especially because as far as retail goes you're really talking about a market that's fragmented into the main metro areas. No one is going to drive from Sydney to Brisbane (or even Newcastle tbh) to save a few dollars on something in a shop. This doesn't make things expensive because of higher shipping costs (that is real but it's insignificant) but because of lack of competition. In many, many market sectors there are only really 2 or 3 players - there are lots of oligopolies here. Supermarkets is one example, but so is liquor retail, major projects construction, Telcos, white goods retail, etc etc etc. This almost always leads to higher pricing for consumers

 

The other big factor driving retailers' costs is commercial property rents. Retail prices are often a rip off, but it's not always the retailer who is ripping you off - it's Mr.Lowy et al, who have been the real winners of the growth in retail market and pricing over the past few years. Astounding that some of the developers like Centro seemed to struggle to make money in such an environment, but that's because they borrowed too much from the wrong people. Westfield have been coining it. As per above, there's no direct link between costs and pricing but there is an indirect one

 

Where I would level an accusation of greed against Aus retailers is on the exchange rate. When it swung in their favour, they tried to keep the upside to themselves to repair/improve margins instead of handing some of it back to consumers, I think because they felt consumers couldn't go anywhere else. But the internet has bitten them on the bum. Good. Their pricing behaviour has already changed from what I can see over the past year or so as there is real online competition now

 

Change is constant, can't avoid it, just got to do the best you can out of it

[Guest chris955]

Over the same period, the UK became an expensive place to live too: http://www.castlecover.co.uk/historic-home-utility-prices/

 

​Well I can only speak from actual personal experience, we are finding it noticeably cheaper here, the difference is the huge gap that used to exist has disappeared and actually gone the other way.I am interested to understand why it has happened.

[Goochie]

Obviously I dont know what I'm talking about having spent 7 years working for a UK company that shipped thousands of products from China every month. You'll notice that I refer to the cost of handling the shipment at all points, not just the "shipping costs"

 

Here is an example;

 

Back in the UK I was shipping a container with 20,000 of the same product inside. This was easy because the Chinese were happy to handle big orders of the same thing and load up one container with the same product. When it arrived in the UK, we unloaded it and stacked all the identical products in one big warehouse from where our customers would collect them 500 at a time and distribute to their stores. Nothing had to be re-packaged, nothing had to be split up or separated, right the way until it arrived in your local store. We imported red products one weekand green products the next.

 

Now, here in Australia I try and get the same thing from the same factory in China. The factory owner isnt happy because I've only asked for 10,000 items and because I know half my market will want them in red and the other half want green, he has to split his production up. He puts his price up to compensate for the hassle and lost time whilst he changes the colour in his paint spraying equipment.

 

Now I only have half a container, so I go to another factory and suffer similar increases in costs for the same reason.

 

I now have to pay someone in China to combine the shipments into one and the costs of the admin goes up, customs charges go up and it becomes a hassle.

 

The container then lands in Melbourne where it has to be split up again. I now have 4 different products which have to be stored and sorted, booked on to the system and allocated to customers. When the customer turns up, he doesnt want to take 500 of the same, he wants a few hundred of these and a few hundred of those. I have to employ more people to split things up, drive forklifts, do admin work etc.

 

All of my costs have gone up dramatically for doing exactly the same thing in Australia as I did in Europe.

 

And its all because there are fewer potential customers on my doorstep.

[Peach]

​Well I can only speak from actual personal experience, we are finding it noticeably cheaper here, the difference is the huge gap that used to exist has disappeared and actually gone the other way.I am interested to understand why it has happened.

 

How did you put it? :: it's called a recession.

[Guest chris955]

How did you put it? :: it's called a recession.

 

​I didnt say that.

[northshorepom]

Obviously I dont know what I'm talking about having spent 7 years working for a UK company that shipped thousands of products from China every month. You'll notice that I refer to the cost of handling the shipment at all points, not just the "shipping costs"

 

Here is an example;

 

Back in the UK I was shipping a container with 20,000 of the same product inside. This was easy because the Chinese were happy to handle big orders of the same thing and load up one container with the same product. When it arrived in the UK, we unloaded it and stacked all the identical products in one big warehouse from where our customers would collect them 500 at a time and distribute to their stores. Nothing had to be re-packaged, nothing had to be split up or separated, right the way until it arrived in your local store. We imported red products one weekand green products the next.

 

Now, here in Australia I try and get the same thing from the same factory in China. The factory owner isnt happy because I've only asked for 10,000 items and because I know half my market will want them in red and the other half want green, he has to split his production up. He puts his price up to compensate for the hassle and lost time whilst he changes the colour in his paint spraying equipment.

 

Now I only have half a container, so I go to another factory and suffer similar increases in costs for the same reason.

 

I now have to pay someone in China to combine the shipments into one and the costs of the admin goes up, customs charges go up and it becomes a hassle.

 

The container then lands in Melbourne where it has to be split up again. I now have 4 different products which have to be stored and sorted, booked on to the system and allocated to customers. When the customer turns up, he doesnt want to take 500 of the same, he wants a few hundred of these and a few hundred of those. I have to employ more people to split things up, drive forklifts, do admin work etc.

 

All of my costs have gone up dramatically for doing exactly the same thing in Australia as I did in Europe.

 

And its all because there are fewer potential customers on my doorstep.

 

I understand all that, but how much of the average retail item's price is related to shipping?

 

It's small beer. And does not explain the disparity that is seen in many markets. Nor the disparity which *doesn't* exist in some others - like electronics/black goods

 

The key difference is that pricing is not a direct function of cost