IGA store owner Mark Crutcher believes both Coles and Woolworths have “bastardized” the retail industry by forcing small businesses in Dubbo and other regional areas to fold.
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Independent grocers are demanding the federal competition watchdog put a halt to the two retail giants building oversized and unprofitable stores in regional areas in an attempt to wipe out local competitors.
A recent assessment by the Commonwealth Bank highlighted Woolworths’ $1 billion-a-year growth and the increasing development of ‘marginal’ sites like the West Dubbo Delroy Park Woolworths.
They believe these are areas that do not have the population to warrant another store.
Mr Crutcher, who is also the Chairman of the Retailers Guild of Australia, agrees the two retailing heavy weights are out to monopolise the industry and are using questionable methods to achieve their end.
Mr Crutcher said Coles and Woolworths control 80 per cent of the market in Australia and are building supermarkets to run at a loss purely for long term business benefits.
Woolworths in particular generates much of its income from poker machine and hotel revenue.
He said in places like Europe, the UK and US, retailers are typically allowed around 18 to 20 per cent of the market share.
“They just want to push independents out altogether,” Mr Crutcher said.
“It’s not just supermarkets - Woolworths owns Dick Smith and Dan Murphy’s too, Dan Murphy’s has to be running at a loss,
“I suggest people be very careful where they choose to shop because before long there will only be two choices.
“They will drive prices up in the long term for both customers and suppliers.”
He gave an example where Woolworths purchased what was previously an IGA car park in a regional city.
A mega supermarket was built directly across the road from another Woolworths.
“Two Woolworths facing each other just to push out competition,” he said.
He believed the issue was “huge” and had increased over the last ten years.
The business owner said he had approached the ACCC for help and was told they could not handle “creeping acquisitions” (buying up property slowly over time).
Mr Crutcher said he did not mind competition, as long as it was fair.
