Page 4417 - Week 12 - Wednesday, 14 October 2009
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So we have to ask the question: what does this experience show? It shows that forced planning may work for a while but it does not survive in the long term. I think it shows that personal preferences of consumers ultimately will determine what businesses will succeed and what businesses will not succeed. If we ignore the preference of consumers, we do so at our peril. I will come back to that in a moment.
There are also various imperatives that determine the structure of our retailing industry. Planning decisions provide the basic structure, and the Chief Minister spoke of this. But the success of retailers in developing and growing their businesses and the failure of some businesses and competitive pressures that exist throughout the retail supply chain are also factors.
To these imperatives there are other additional factors. There is a lot of vilification of Woolworths and Coles, but let us just recall that Woolworths and Coles are two of our major retailers, Coles are now part of Wesfarmers. They compete not only in Australia but in an international marketplace. We have had the introduction of foreign retailers into the Australian market, and Aldi has done incredibly well. But the expression of consumer preference for particular styles of shopping has seen the growth of major shopping centres such as the Canberra Centre and the Hyperdome.
Recognising the issues facing Woolies and Coles in competing on a world stage, they are major companies and they also need to be able to compete, but they are also major employers in Australia. They employ tens of thousands of people; they employ many people in the ACT. They generate profits that support their businesses and many of those profits are the dividends that are paid into the superannuation schemes of many of us. Their profits and their dividends are critical to the performance of many of Australia’s major super schemes.
These are the problems that we have in getting the balance right. It is imperative when the Chief Minister’s committee reports back—I am sure someone in the opposition will take up the opportunity of the brief—that we do get this right, and if we are simply relying on planning I warn you, I caution you, that you are dooming yourselves to potential failure. It might be expedient now, but the problem is that in the past the planning as a tool for controlling markets has inevitably failed.
We need to look at the overall state of supermarket competition in the ACT. On page 59 of the report Mr Martin comments:
Like the national retail grocery market, the ACT appears to be reasonably competitive in terms of both price and non-price measures, especially since the entry of the Aldi budget stores.
However, the supply of supermarket capacity has fallen behind demand in central Canberra and Gungahlin. Given that population projections 2007 to 2012 show a 50,000 (15%) increase in the ACT population, there will be increasing pressure on supermarket capacity.
And that is when we get back to the retailer that has contacted me. His concerns are that his exclusion will actually deny the people of Canberra the competition they deserve. He says:
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