IGA starts online delivery service

IGA has announced the launch of its new national grocery delivery service, IGA Shop.

The online store supplements the existing online offer of many independent family owned IGA stores across the country, providing  customers the opportunity to shop from home and have products from their local IGA delivered.

The launch follows IGA’s Priority Shop offering, a service that was introduced amid the COVID-19 global health crisis, to provide local grocery deliveries to those in need. While IGA Priority Shop was only available to the elderly, vulnerable or isolated, IGA Shop is available to everyone in the community in hundreds of local areas across Australia.

Shoppers can order from a range of items for the pantry, fridge and freezer via igashop.com.au.

“As independent family owned businesses, many IGA stores have been providing online shopping and home delivery services to their local communities for some time,” says Danielle Jenkinson, EGM Retail Channels, Metcash Food. “We’re thrilled to be able to offer an online service from even more IGA stores across Australia and to further support our local communities.

“While we prefer to serve our customers face to face, we’ve developed this online solution because we know some of our local shoppers aren’t able to get out to the shops right now or would prefer to stay away. We aren’t yet experts at home delivery, so please bear with us as we iron out any kinks and improve the online shopping experience. It’s definitely not perfect, but we’ve built this solution quickly to ensure that IGA retailers are able to continue to support their local communities as only they know how.”

IGA Shop will see hundreds of independently owned IGA stores across Australia offering a home delivery service from your local participating store, straight to your door. As the stores are local family owned businesses, the range and pricing may vary, and therefore the final cost will be confirmed between the owner and customer.

IGA invests in edible bug revolution

The IGA has announced it will stock edible crickets. The addition of Grilo products to IGA shelves comes on the back of increasing demand from customers for more sustainable sources of protein.

“We are passionate about bringing our customers new and exciting products that they wouldn’t usually be able to find,” says the HG Retail Group.

For people looking to reduce their environmental impact while also meeting dietary needs edible crickets offer the perfect substitute.

“Grilo Protein is one of these such products and we are proud to support this innovative and local company who is committed to supplying healthy, sustainable and future conscious food that tastes great!” said Rob Outridge, IGA owner, Maleny.

Eating crickets has previously been uncommon in the West, largely due to the ‘ick’ factor associated with eating bugs. However, consumers are now recognising that not only are crickets mild in flavour, but their nutrient density, sustainability and versatility make them a more sustainable and delicious protein alternative.

IGA’s move to add Grilo products to their shelves is incredibly exciting and demonstrates the growing understanding for the need to find food solutions that meet both planet and human needs. We believe the growing trend of consuming insects will result in a healthier planet and healthier bodies. Here are three reasons why Grilo products will now be on IGA shelves:

Environmental alternative 
Crickets are the most sustainable source of protein on earth. They require far less resources (water, land, feed and energy) than other popular sources of protein, such as chicken, beef or pork, and produce 80 times less methane than cows. Given that 18% of greenhouse gas emissions is a result of livestock production, cricket’s growing popularity should result in a significant lowering of emissions.

Nutrient dense 
Crickets are extremely nutrient dense, containing 69% protein, vitamin B12, Omega 3, iron, potassium and calcium. Their digestibility is higher than that of plant proteins, making it easier for the body to extract and absorb all those nutrients.  Given the busy lives lead by most people and the impact of good nutrition on mental and physical health, the need for accessible, easily prepared nutrients is great.

Versatile and delicious 
Given their mild, nutty flavour, crickets are extremely easy to incorporate into meals and smoothies; sweet or savoury. Alternatively, Grilo energy bars are an extremely convenient and delicious means of meeting daily protein requirements.

Liquor and Convenience help lift Metcash H2 profit

Metcash recorded interim net profit after tax of $2.9 million for the second half of 2017, up 24 per cent on the previous half of $74.9 million, partly driven by continued growth in the Liquor segment and improved earnings in Convenience. Read more

Frewville Foodland IGA wins at international awards

Frewville Foodland IGA in South Australia has been named the 2016 IGA Australia International Retailer of the Year at the supermarket chain’s international awards in Las Vegas.

The 2016 IGA International Retailers of the Year were part of the IGA 90th Anniversary Diamond Celebration. 

The awards are bestowed upon the IGA retailers from around the world who, based on IGA’s globally applied standards, have achieved exemplary excellence in retailing and advancement of the IGA Brand.

Frewville IGA is Australia’s first certified organic supermarket, with one of the largest ranges of fresh produce in the state. The 3,100 square-meter store also includes prepared foods, a meat servery, bakery, cheesebar and readily available fresh seafood, a health-and-wellness section, and a Kitchen and Coffee bar. 

The supermarket is owned by Nick & Spero Chapley.

“We’re delighted that our Frewville Foodland IGA store has been recognised on the international stage,” Nick Chapley said.

“As an independent retailer, customer service is at the heart of our success along with continual in-store innovation and having one of the largest ranges of fresh produce in South Australia. We are known in our community for our unique product range, including brands our customers love—a wide range of local and organic produce, cultural and gourmet ingredients as well as a bakery, cheesebar and readily available fresh seafood.”

Apart from the Australian award, retailers from the US, China, and the Carribean received awards on the night.

 

Costco driving change in Australia’s FMCG sector

Collectively, Australia’s supermarket and grocery stores and fuel retailing industries will generate an estimated $ AUD125.1 billion in 2015-16. Business information analysts at IBISWorld forecast that this figure will reach $AUD134.5 billion by 2020-21. 

The traditional supermarket giants Coles and Woolworths currently account for more than 70 per cent of the supermarkets and grocery stores industry in Australia, and over 40 per cent of the fuel retailing industry.

Competitor Costco’s continued expansion has seen the bulk-buying retailer grow its share of supermarket revenue. According to IBISWorld industry analyst Brooke Tonkin, “the company already claims 1.2 per cent of this $ AUD88.1 billion dollar industry, with only seven stores.” Costco’s ongoing diversification into the fuel retailing industry is expected to increase competition, with the company’s low-price strategy attracting motorists, as customers have little brand loyalty in terms of fuel.

“The trading landscape for supermarkets and fuel retailing has changed considerably over the past three decades, with new entrants increasing competition, and changing consumer preferences creating new challenges and opportunities,” said industry analyst Brooke Tonkin.

Price competition

Supermarkets and grocery stores once operated alongside specialist food retailers, but now compete fiercely with specialist retailers on price and product range in a bid to attract shoppers. Industry retailers like Coles have recognised the importance of price competition by implementing substantial price cuts across their stores. Consumers have become increasingly price-conscious, and want to be assured that they are purchasing value-for-money goods.

Sales volumes generally remain relatively static for supermarkets, as shoppers tend to buy similar goods from week to week. As a result, price cuts have a significant effect on profit margins. To combat price competition and maintain profit margins, Woolworths has been forced to reduce costs.

“While supermarkets continue to compete on the basis of price, other factors such as convenience, product variety and quality have emerged as driving forces in securing customer loyalty. This helps explain the growth of Costco, which has steadily gained market share over the past five years,” Ms Tonkin added.

The Costco model

Convenience has become a major factor in attracting customers, with major supermarket players attempting to broaden their ranges to include basic necessities as well as specialist gourmet products. Meanwhile, Costco is attempting to increase its market share through the opening of new stores, and the sale of a diverse range of products in bulk. The expansion of new stores has been a major driver of ALDI’s growth, and similar success is expected for Costco, as the number of stores is a key competitive factor.

Costco offers a much wider range of products than the current supermarket duopoly at its seven Australian stores, including clothing, televisions and other appliances. Costco’s bulk-buying power allows it to offer very low prices. The wholesaler is able to offer such large discounts on its products and remain profitable due to its annual membership fee of $AUD60.

The majority of the company’s profitability comes from this fixed source of revenue, allowing it to pursue aggressive price competition. Costco’s earnings before interest and tax have only shown positive results once in Australia since 2009, indicating that the company is primarily focused on gaining market share in Australia. The membership fee also helps foster customer loyalty.

Store location is also important, and Coles and Woolworths have attempted to broaden their reach by expanding fuel station grocery offerings into mini supermarkets. “Costco’s expansion into fuel retailing is in line with this trend, as the wholesaler plans to become a convenient one-stop-shop where customers can buy all their groceries and fill up on petrol in the one location,” Ms Tonkin explained.

Fuel retailing

The fuel retailing industry faces a high level of competition, as price and location largely determine where motorists buy petrol. “Most consumers see petrol as an undifferentiated product and therefore purchase on price – there is effectively no brand loyalty,” Ms Tonkin said.

The Costco fuel retailing strategy offers customers convenience and consistently lower prices, in line with the company’s grocery strategy. Costco’s establishment of a Moorabbin store with fuel pumps is a first in Victoria. 

The first Australian Costco fuel station was established in Liverpool, NSW, in November 2013. The introduction of a fuel station at the Brisbane North Lakes store in May 2014 prompted a flurry of price cutting in the surrounding area, as other fuel retailers scrambled to compete with Costco’s low prices.

However, Costco’s fuel prices remained lower than other retailers in the city, with customers saving up to 15 cents per litre. In the months following its opening, competition from Costco has continued to force down prices among other petrol stations in the area.

The way forward

As ALDI and Costco continue to expand in the supermarkets and grocery stores industry, the well-established major players are expected to look for new ways to remain competitive and boost market share. Woolworths announced in September 2015 that it would invest $AUD65 million in store improvements and increasing staff hours. Meanwhile, Coles has already begun upgrading some of its larger stores to a new market-style format.

“These strategies are designed to keep shoppers instore for longer by presenting stores as foodie destinations, and attract greater sales through premium offerings such as ready-made meals and delicatessen products,” said Ms Tonkin. 

These new stores also offer patisserie goods, artisanal breads and even sushi bars. However, major competitor ALDI is also transitioning its stores to a market-fresh approach, with more fresh food, branded groceries, and ready-to-go and organic food. This is expected to further increase supermarket competition.

ACCC concerned over implementation of Food and Grocery code

The Australian Competition and Consumer Commission is investigating reports about the approach supermarket retailers are taking to implement the Food and Grocery Code of Conduct (Code).

ACCC Chairman Rod Sims said, “The aim of the Code is to redress the imbalance in bargaining power that can exist between suppliers and large grocery retailers by prohibiting certain types of unfair conduct”.

“The Code imposes a duty to deal with suppliers in good faith and we are concerned by reports we have received from suppliers that suggest that some retailers have not got off to a good start when it comes to implementing the Code,” Mr Sims said.

“The ACCC has concerns as to the manner in which some retailers, in particular Woolworths and Aldi, are presenting new Grocery Supply Agreements (GSAs), which might give the impression that the supplier is not able to negotiate the terms of the GSA.”

“The ACCC is also concerned about the low level of detail provided in some GSAs about the circumstances in which certain payments may arise.”

The Code sets out a number of prohibitions on, for example, requiring a payment for wastage that occurs at the premises of the retailer. While it is possible for retailers and suppliers to opt out of such prohibitions, this can only occur if the opt outs are agreed, if the agreement sets out the circumstances in which the opt out applies and if the payment is reasonable in the circumstances.

“One of the purposes of the Code is to provide certainty to suppliers, who are often in a much weaker bargaining position when dealing with retailers. In order to provide that certainty, the ACCC expects retailers to set out the circumstances in which they will seek payments from suppliers,” Mr Sims said.

The Code requires that retailers offer code-compliant GSAs. Suppliers should not feel compelled to sign these agreements and should seek advice before signing them. In particular, the Code will confer protections on suppliers 12 months after a retailer has signed up to the Code, regardless of whether a supplier has accepted a code-compliant GSA.

The ACCC said it has written to retailers about the manner in which they purport to be giving effect to the Code. The retailers have responded providing their new GSAs and the correspondence they have sent to suppliers offering the new GSAs. 

The said ACCC said it will continue to monitor compliance with the code.

JOIN OUR NEWSLETTER

JOIN OUR NEWSLETTER
Close