Aussie products can’t afford supermarkets

Small Australian companies are finding it harder to get their products on the shelves of major supermarket chains:

This policy, which is being adopted by both Coles and Woolworths (who together have over 70% of the market place) is to free up supermarket shelf space to allow for the introduction of their own private label range. In effect it is proposed to limit consumer choice across all products sold. For example the jam or tomato sauce category will include their two top selling products plus a range of Coles or Woolworths branded products.

The effect of this policy is creating major difficulties for all the Australian owned manufacturers, including those that produce our products, to the point where we have been struggling to keep a large proportion of our product range available on supermarket shelves for our loyal customers to purchase.

In recent weeks the problem has been compounded by Coles suggesting to many of our manufacturers that unless they receive large sums of money by way of an up-front payment, which in some cases is up to $100,000, then they will no longer be prepared to carry our products. Interestingly, none of the requests for money are being sought in writing.

You’ll find more about this at the Disk Smith Foods website. Small businesses need to work together to provide competition for the two major supermarket chains. We should promote each other, buy from each other and lobby on behalf of each other. Coles and Woolworths are big, in part, because of the laziness of small business.

Thanks to Craig Kelly of Southern Sydney Retailers Association for pointing me to this story. Kelly says our food prices are rising faster than elsewhere and that this is in part due to the last of Price Discrimination Legislation.

My interest in all this is small business. Tower Systems only sells software to small business. It’s what we have done for 26 years. Commercially, it suits us to support small business. Outside of that, I believe small business has more to offer our community than bland retail experiences offered by the majors.

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Woolworths farmer profit promise needs explaining

Woolworths has announced that the entire day’s profits from their Woolworths and Safeway stores from January 23 will be given to Australian farming families in need. You can read the Woolworths announcement here. I would like Woolworths to announce exactly what constitutes profit. Such transparency is crucial. I would also like them to explain why they are not including profit from the Beer Wine and Spirits, Dan Murphy, Dick Smith and other stores.

While the Woolworths gesture is better than them not doing anything, I would prefer to see them make a long term commitment to more equitable dealings with farmers as well as a commitment to Australian produce and products over imported produce and products. I would also like to see them make a commitment to small business. Only last year Woolworths set up shop in Maleny to much criticism from those concerned for small businesses.

Woolworths and Coles dominate retail in this country. As a result of the power of their supermarkets they dominate farming and food processing. This is where Woolworths can help Australian farmers the most – more than contributing the profit from one day.

We need to ask questions of Woolworths in an effort to get behind the PR spin. We need to challenge them to do more than stage a stunt and make a real and lasting difference to our farmers and the wider community.

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More cake?

french_cake.JPGI am in Paris and what would a blog from abroad be without a photo from the window of a local cake shop. Paris is a city resisting globalisation in the high street. While global retail chains are here, they are not here in the numbers I have seen elsewhere, especially in the food areas. Paris is known for its cakes and this shop did not let me down. Now if only we did not let our cultural cringe let us down in the cake shop stakes back home.

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Small businesses keeping local traditions alive

blog_kaffe.JPGThis is how coffee is served in Vienna coffee houses. It’s a tradition the independent businesses uphold. Small businesses are good like that, upholding traditions. Sure a coffee in a take-away cup is hand if you are on the go but sometimes sitting and taking time to reflect over a coffee can be more useful than forever being on the move.

While I was sitting at café Mozart looking at my second coffee the tradition of their service led my mind to wander about the difference between this experience and that of a less traditional coffee house like Starbucks, or Cafe Nero in London or Hudson’s back in Melbourne. While those corporate coffee houses clearly provide a worthwhile service – you only have to see how busy they are – it’s more about the community aspect, providing a comfortable place for conversation and identifying with the aspirations represented by the brands.

Café Mozart, Café Schwarzenberg and the many other similar cafes here in Vienna seem to me to be more about respecting their heritage of good coffee, good food (cakes) and good service. They have not, from what I can see, moved with the times. They don’t need to. They are proud keepers of tradition.

Many small businesses are equally proud keepers of tradition, in the face of competitor, media and peer pressure to move with the times and adopt the next big thing in their channel. We need to find ways to make it cool to preserve traditions, good traditions of course. We need to understand and uphold that change is not always necessary. We need to show our small businesses as being important for keeping our part of the world like we like it.

I’d hate to come back to Vienna and find fewer places serving coffee in this way. It’s part of the charm of the city for me. If the global brands win more business and close more independent coffee shops down then I’d have less of a reason to travel here. That may sound extreme but local experiences, like coffee served this way, is one reason I enjoy travel.

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Global giant Starbucks unwittingly helps a small retailer in Vienna

starbucks-vienna.JPG

I was shocked, when I rounded the corner just outside the Hofburg Palace in Vienna today, to find a Starbucks store next to Halder, the place I had come to visit. Halder is quintessentially Vienna, offering fine crafted products backed by perfect Viennese service. The quiet back-street has been disrupted by the coffee giant. Starbucks is the star and Halder the chorus. In this city of excellent coffee I could see no value in a Starbucks presence let along here next to the Halder store. I walked past the Starbucks and muttered something critical of globalisation.

The owner of the Halder store soon set me straight. I asked her what she thought about Starbucks, expecting some venting. She almost whispered how happy she was they were there. Even though they have only been open in this location for four months, business was up. Starbucks was proving to be an oasis for weary tourists – Vienna is a city where you walk most of the day to get around the key spots – and enough stopped in the Halder store to make Starbucks a welcome neighbor.

While business was steady before Starbucks, it was not showing great growth. Since Starbucks there has been good growth. New customers are finding Halder and as my own experience illustrates (three trips to Vienna and three trips to Halder) it’s a store you go back to. Their range is unique.

So, what does this mean for my views on globalisation? I cannot begrudge the owners of Halder the growth they have thanks to Starbucks. I also acknowledge that the coffee giant has created a store with some effort to fit in. Those points made, I have serious problems with globalisation: the bigger companies get, the more smaller competitors close; the more local customs are lost; the more service is a KPI and not something from within; and, the more a shrinking few control a growing bucket of global wealth.

It’s not all bad, as I found out in Vienna today.

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Globalisation has London in its paw

starbucks.JPGMy take-away from the last two days in London is that globalisation has London in its paw. Major high street real-estate is controlled by global brands. Even side streets are populated with global brands. Local, quintessentially English businesses, are fading fast. From the coffee chains to fast food to fashion, London is less London today than it was a year ago and less then than a year before that. Soon, we won’t need to travel because the local experience we used to travel for will be gone and everything else, if one can make money from it, will be on tour.

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