An obvious outcome from the ACCC.

I wonder how anybody could be in the slightest bit surprised that Coles and Woollies are raking in the profits from petrol retailing, as has been reported recently.
We have allowed a virtual duopoly to emerge and duopolies behave in pretty predictable ways, for the benefit of shareholders, that is the way the system works. Oh, you will not be able to nail collusion, or any of the other nasty anti competitive behaviours on them, probability is they will not be happening, as they are not necessary with a duopoly, simple self interest will drive profitable behaviour. The opportunities to cross merchandise, cross promote, and leverage operational logistics costs that exist just enhance the attraction of it all.
The scale of the major enterprises makes competition from local businesses a huge challenge. Pundits like me can wax on about the opportunities the small agile enterprises have, how the net has given them the flexibility and transparency to take on the big guys, but when it truly is David Vs Goliath in a local market, the little guy will rarely win. He will be swamped by the “man” who can simply ignore as a short term irritation the slower traffic, lower basket value, squeezed margins, and any resident reaction that occurs, that would mean death to the smaller operation.
I feel for the small guys who have made a huge effort to compete, but being in a commodity market means that scale counts, and in the petrol market, Coles and Woolies now own it, as they do groceries and hardware, with office supplies evolving down the same path. I bet they cannot wait to get their hands on the still regulated pharmacies and newsagents, where the regulation has enabled a cosy club for small businesses to exist.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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