I’ve been predicting the demise of the grocers for three decades!

By and large I’ve been wrong or let’s just say it’s taking longer than I expected. Carrie LaFranz in last week’s AFR has an interesting take on this subject. 

Amazon muscles in on the big Two’s territory. The example she gives is a family now spending 50% of their monthly grocery budget with Amazon. Speedy delivery on products that are cheaper and sometimes, much cheaper, is obviously very attractive. 24 hours appears well worth the wait for an increasing number of people. The investment in robotics by Amazon, along with their often more competitive prices, suggests that there is a shift underway.

Now I’m old school, reluctant to jump online, with a fear of getting stuck in a glitch that puts me into an endless loop, where “the computer says NO.” But according to Goldman Sachs I am in a shrinking minority. They report that Amazon are already the second largest online retailer after Woolworths.

My wife concurs, that’s got to be a first, my wife agreeing with Goldman Sachs. She proudly announced at the weekend that her dark chocolate (95% cocoa – in my humble opinion it shouldn’t even be called Chocolate) had just arrived via Amazon at a whopping 50% discount, along with some toothpaste, on a Sunday! Something is going on.

As somebody who spends his life going into bat against the large corporates, normally representing the shareholders of established private companies, we are realistic. This doesn’t exactly shatter the corporate power of Australia’s duopoly in the grocery sector, but increased competition and lower prices are a good thing.

References:

 [1]  AFR – https://www.afr.com/companies/retail/amazon-is-quietly-turning-into-a-major-rival-for-coles-and-woolworths-20241112-p5kpy0