producer price index today and the consumer price index on Wednesday
will focus plenty of attention on the impact of the petrol price spike
– but punters might well wonder if the big retailers are taking them
for an early ride. A background conversation over the weekend with a
major supplier to all the major retailers uncovered a large degree of
cynicism about price rises on the shelves.

The supplier reckons
the big boys enjoy fixed-price contracts on just about everything they
sell, including fresh produce, meaning the pain of the higher fuel
prices is being felt lower down the chain and not in the price
Colesworth pays. Price rises in the supermarkets aren’t due to
September’s oil price surge. (The milk price rise has been coming for
some time – and the dairy co-op brigade has been struggling just to
claw back the ground it surrendered to Colesworth when dairy was

The anonymous supplier had an interesting ranking
of the supermarkets in terms of the desirability of doing business with
them: German-owned Aldi was clear number one, while Woolworths was
clear last. “Aldi want a partnership. They’ll look for ways to help
reduce your costs and then share the benefits of that with you.
Woolworths just wants to take it all,” Anon said.

The rather secretive Aldi has quietly opened its 100th store in Australia with plenty more planned. In a rare interview with the Australian in July, managing director Michael Kloeters said they intend to keep adding about 36 stores a year in the eastern states.

There could be a threat to the duopoly yet.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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