COMMENT — Across the Western world increasingly large chains dominate most products you buy. Groceries. Petrol or gas. Liquor. Books.

In difficult times,  support independent stores not large chain stores. Not mega-supermarkets.

Cheaper Groceries & Fuel.

Genuine competition means we pay less. Smaller players create competition.

Small independent stores are friends of the family.

Consumer choice is one of few weapons we have to create competition. Sometimes, we can sell our shares in such monopolies.

The only two forces controlling many industries are:
a) consumer choice and
b) shareholder activism.

Especially since, any Govt regulation or constraint on market power in any Western economy is rare now. Government has given up on regulating trusts & monopolies.

Where is GOP’s trust-buster, Teddy Roosevelt when you need him?

Market Power is a tax on citizens.

Governments now ignore citizens &  small business concerns about corporate power or wealth.Whilst paying lip service to competition.

In trying economic times, duopolies (two main players) have lower costs & more market power. they often gain market share, as their pockets are deeper.

That is why it is crucial we purchase from small business in a downturn. Consumer purchasing is one of the few levers we can pull against market power.

We must help small business avoid being squeezed out. (Big corporations use their deep pockets in market downturns to consolidate & shut-out small players.)

Market powerhouses can also control & set prices. And each player can signal to collude on prices. Although illegal, economists recognise it as done. Signalling is tacitly explained in most MBA Economics classes. I learnt it. It’s practised daily in the newspapers.

Market Power is an added cost passed onto consumers as higher prices, or lower quality goods or poorer service (like self-scanning, or untrained staff) .

Market power is a tax on consumers. A tax on prices. And a broken promise on quality.

And, since when do corporations have the right to tax us consumers?

Australian duopoly.

In Australia, Graeme Samuel’s pro-corporate ACCC regulator does not regulate. Nor seem to ensure lower fuel or grocery prices. In a coma-inducing report on Retail Groceries in one observation they unfairly blamed independent operators, IGA, for not competing enough! Not the duopoly.

IGA in reality is the only chain keeping competition, along with smaller independents. Instead they are blamed. I now buy more than 50% of my groceries from IGA. And most of my meat, coffee, fruit & veg from markets.

Let’s examine the market powerhouses. Coles & Woolworths.

The two big Australian monopoly players Coles & Woolworths control many sectors. Starting with food, groceries, magazines, fashion, variety, liquor, petrol, stationery & technology markets. They want to kill pharmacies & newsagents as well.

The two companies own:

Coles. Woolworths. Safeway. Kmart. Target. Big W. Liquorland. Dan Murphy. Officeworks. Harris Technology. Coles Express. And these are just a  few brands.

And with their docket scheme they largely control petrol pricing.

The large petrol producers also do not pass on reduced prices ex-Singapore, despite their claims. Unfair, as Alan Kohler pointed out on the ABC News last night, and RACV pointed out on Channel 9 Today show this morning.

The Petrol Commissioner & Fuel-Watch are substitutes for real regulation.

Grocery prices keep skyrocketing. Inflation is not a factor, as the ABS manipulates it for political purposes. Michael West outlined the case of an Inflation Rate that undershoots the real figure.

The Inflation Swindle.

The 2thinknow View has long been that inflation on basics has been running at 7-15% since the mid-1990s.

Rampant inflation has been disguised by substitution of ever-more inferior Chinese products, over-inclusion of consumer goods, magic maths and IMF encouragement. Why? Another grand economic experiment in manipulating who holds the debt. 290% of GDP in debt for US consumers.

Whenever you dig into economic theory you can smell the balderdash. It’s the bit nobody understands, where “magic happens”. Most theories have their hey-presto, magic happens moments.

Economists should come with a warning label. “May sprout impractical theories, and be arrogant whilst doing so. Will later profess to undying love with Keynes, despite tangoing with Friedman. We’ll always have that fiscal romp in Paris, Milton.”

Don’t listen to economists too much. The best economists should be ignored half the time.

It’s the one good thing great political leaders do. Ignore 50% economists 50% of the time.

Australia, What needs doing?

We need to support small independent grocers to re-balance our market.

And the Federal Government must step in. The ACCC must control Coles & Woolworths.

Or Australia can wait for Aldi to do it. Coupled with the arrogant home-brand strategy of Coles & Woolworths this will end up destroying shareholder value long-term. It won’t be pretty. Markets work, but when they do, it’s not pretty.

More on what YOU can do shortly.

USA monopoly.

In the USA Walmart has come into small towns. Their size has dominated the market in almost every sector.

Walmart have moved into towns, and smaller ’strip’ shop independents have moved out. Standardising. And crushing potential for independence and innovation.

Walmart may lower consumer prices, but they do this by cannibalising other American jobs, and lowering wages. There are well-documented cases in numerous books & journals on Walmart.

Walmart too will eventually implode. But not before it does irreparable damage.

What can you do?

1. Buy fruit & veg from markets
2. Buy from farmers direct
3. Buy from small butchers & local bakers
4. Increase pressure on the Federal government online & on talkback radio to do something about grocery & fuel prices
5. Don’t listen to ministers or congressmen when they tell you they can’t. They choose not to.
6. Buy whatever goods & services you can from small business
7. Shop in strip shopping instead of large stores
8. Pay cash.

It goes beyond pricing. Small shops also provides a diversity of choice.

Walmart, Coles & Woolworths increasingly cut out wholesalers & brand manufacturers.

Once home-brand private label products have the market share who will you complain to then? Governments already do not listen to citizens about grocery prices or competition.

The 2thinknow View.

Support small retailers & small business. They are the only ones working to give you cheaper food & fuel.

Support small. Buy local.

Save a small business today, and pay less tomorrow.

The author owns no shares in any company mentioned in this article.