Outspoken Australian entrepreneur Dick Smith has started a war of words over supermarket giant Woolworths’ decision to source its private label tinned tomatoes from a new Australian supplier.
The new supplier is as yet unnamed by Woolworths.
Smith laid the blame for SPC’s loss indirectly on the performance of German supermarket chain ALDI.
“Woolworths and Coles are desperately trying to get their costs down, because they are losing business to ALDI,” he said.
Speculation that the Woolworths decision related to concerns around quality, sizing and supply were scotched by SPC managing director Reg Weine, who wrote a strongly worded letter to the Canberra Times [inset].
“The theory that there are quality concerns with SPC products… is flatly wrong,” he said.
SPCA managing director Reg Weine defends against quality concerns.
In turn, ALDI defended its pricing strategies and relationship with SPC.
“Since the first ALDI Australia store opened in 2001, we have worked closely with SPC to build a long-term, sustainable partnership and supply customers with a range of locally sourced products,” ALDI said, in a supplied statement.
“In fact, over the last ten years ALDI has more than tripled the value of orders sourced from this iconic Australian manufacturer.
“The strength of this partnership has been driven by a commitment to consistently deliver high-quality products to customers.”
“However, as a business, we do not support the introduction of pricing levels that are unsustainable in the long term and may put pressure on the supply chain,” ALDI said.
“When pricing adjustments are needed due to changes in the market, we work closely with our suppliers to reduce any negative impact and achieve the best possible outcome for their operations and our customers.”
Convenience: Step up!
According to AACS CEO Jeff Rogut, Australian convenience stores have an opportunity to step up and provide consumers with products and brands not carried in major supermarkets.
As convenience stores increasingly offer customers time saving solutions, whether on-the-go, on the way home or going to work, food will become the future of convenience.
According to Mr Rogut, convenience retailers overseas have been capitalising on the food opportunity, as “there is a huge impetus for locally grown and supplied products to the point where images of the local farmers and history are shown above the produce they supply in some stores”.
“We must offer overall value and not set ourselves up as price leaders which we will not be given some of the industry supply,” he said.
“Trying to cram a supermarket into a small store is not the answer.
“Convenience retailers can offer suppliers outlets for unique products that the major supermarkets do not wish to carry.”
“There is more to retail than just price and many of our retailers have lost sight of this particularly when faced with formidable price leaders such as ALDI, and if other [German retailers] such as Lidll enter our market, it will be even fiercer and they will just not be able to react appropriately because of how many customers have been alienated.
“Sure price is important, but so are areas such as the store experience, range, service, contemporary store design, technology, and importantly, fresh products prepared in store such as quality take home meals and excellent bakery.
“Convenience needs to make shopping easier. Some of our retailers have ceased being merchants.”