It’s no secret that the Australian retail sector is massively monopolised between Coles and Woolworths. I know it, you know it, the Australian government knows it.

When Costco opened in Melbourne it gave those of us who were sick of feeding the duopoly of Coles and Woolworths an alternative. Whilst not quite the bargain store that is offered in the US, Costco Australia has thus far provided a viable alternative that unlike Aldi, doesn’t revolve around no-name home brands.

Now looking to expand its Australian store base Costco is wanting to open up a store in Auburn New South Wales. Not surprisingly the big guns over at Westfield, AMP Capital and the Shopping Centre Council of Australia, who let’s cut the crap and just state are lobbying on behalf of Coles and Woolworths, are now whinging about Costco’s proposal to open up in Sydney.

Not on the merits that they’ll be able to compete or because they’ll haemorrage business to Costco. No, Coles and Woolworths are simply objecting to the fact that a Costco in Auburn will “cause major traffic congestion” around the area, and that due to existing zoning laws building a Costco in Auburn would be illegal. They also claim that any modification to the existing planning laws or exceptions made for Costco would of course be massively anti-competitive to other retailers.

Ladies and Gentlemen welcome to the abysmal state of anti-competitive retailing that currently exists in Australia.

Firstly let’s address the traffic issue. Now if traffic levels increase, as they did when Costco opened up in the Docklands this is because of one reason: People are sick to death of being ripped off blind and are flocking to Costco.

If people are shopping at the new Costco store then they aren’t shopping at Coles or Woolworths and paying stupid money for their groceries. If Coles and Woolworths offered any sense of value and competitiveness then there’d already be traffic jams with people trying to get to their stores.

But no, instead of addressing the issue of charging bullshit prices for things Coles and Woolworths have decided to pretend to give a crap about traffic levels in the surrounding area when half of Sydney rush to escape their price monopoly.

‘Oh noes, our prices are so stupidly high that people will cause traffic jams the second a viable alternative opens up! OMG WE CAN’T LET THIS HAPPEN!’

Then there’s the issue of the planning laws. Current planning laws prohibit the Auburn site to be used as a supermarket or department store. Costco hope to get around these planning laws by defining themselves as a ‘bulk goods retailer’.

Currently no such category exists within NSW planning laws.

I believe due to the fact that they don’t bulk offer higher end goods (whitegoods and such) that the store cannot be classified under the existing ‘bulky goods retailer category’.

Why a bulk goods retailer category doesn’t exist already I have no idea but the category defines Costco to a T, or should that be C. Seriously have you tried walking into a Costco and not buying 99% of the day to day stuff in bulk?! There’s a reason their trolleys are huge and people walk in there spending hundreds without realising it. Everything practically comes in bulk or at the least a small multibuy pack.

This is the very definition of bulk and Westfield’s claim that

the proposed store is in breach of existing state planning laws, is “inappropriate” and that to create any special exemptions would be “anti-competitive” for other retailers.


is a load of utter crap. Anti-competitive for other retailers?! These are the crafty bastards who move into an area, operate at a loss until everyone else closes down and then jack up the prices to unheard of levels.

In 2006 Coles and Woolworth controlled 78% of the Australian grocery market and 25 cents out of ever dollar spent found it’s way into either company’s pockets.

Today both Coles and Woolworths refuse to allow their market shares to be made public, arguing that the information “is commercially sensitive“. This of course is code for our market share is now so ridiculously high there is no way to put a positive spin on it. Better the general public don’t know just how much they are being shafted.

The Victorian government helped establish the Docklands Costco store in Melbourne and that didn’t seem to turn out anti-competitive.

Last year the federal government acknowledged that the Coles and Woolworths duopoly forced “Australians pay more for food“. Not only that but

OECD data (showed) Australians were paying the fastest-rising food prices of any developed nation – up more than 40 per cent this decade.

Official data shows that since 2000, the pace at which food prices have risen has been 15 per cent faster than general costs.


Of course this just shows that the Australian retail market is already so competitive and simply can’t handle Costco and it’s anti-competitive behaviour of not shafting the Australian public.

In response to this alarming statistics Consumer Affairs minister Craig Emerson pledged that “the Government would concentrate on promoting competition“.

If redefining zoning categories to accommodate a new type of bulk retailer is what’s needed to promote competitiveness in the retail market then it should have been done years ago. Costco simply doesn’t fit into Coles and Woolworth’s existing ‘we are the only choice therefore you will pay whatever the hell we charge’ business model, hence the grandstanding over traffic congestion and zoning permits.

Is it anti-competitive to evolve existing planning permit laws to introduce competitiveness directly into the Australian retail sector? Or should we continue with out current duopoly system which sees Australia with some of the highest food prices in the world…

If the government is serious about combating anti-competitiveness then there’s really only one choice to make here.



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  4. My shopping experience at Costco Melbourne
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