Are Coles and Woolies the very big elephant in the room?

A lot of the discussion in and around the transport industry is based on antagonism between the government regulators, the transport customers and the trucking industry, including those working in it. A shot of reality needs to be injected into discussions because trucking needs a united front to deal with its biggest issue, the big retailers.

 

There is a blame game going on, where a truckie’s life is made hard by the roadside enforcement, the customer puts too much pressure on the operator and the enforcement system punishes the operator for something outside of their control.

 

A casual observer could look at the situation and think it fair to allocate some blame to all of the parties. They all have their issues and agendas so they must all take some of the blame for problems which occur.

 

This would be a reasonable assumption to make, all things being equal. However, things are not equal when one of the elements in the equation is so big and powerful, their sheer size distorts the picture and normal market forces. We are talking about the supermarkets and their incredible size and power in our economy.

 

This week Deloitte have released their ‘Global Powers of Retailing 2013′ report and some of the figures make interesting reading. In Australia we look out at the rest of the globe and assume the large supermarkets have a power elsewhere in the world, similar┬áto the kind of influence they have in Australia.

 

In fact, the two big players in retail in Australia, Woolworths and Wesfarmers (owners of Coles), are both in the top twenty retail operations in the world. This top twenty is dominated by the US and Germany, with Australia equal with France and Japan with two entries. The UK has one in the twenty, Tesco, number two in the world behind Wal-Mart from the US.

 

Our country’s economy is tiny when compared to these economic giants but our supermarket are in the big league. What does this tell us? It tells us the individual supermarkets are, proportionately, more powerful in our economy than they are in the big economies of the world.

 

Our biggest transport operator, Toll, with an annual global revenue of $8 billion dollars doesn’t look so big when facing either of the big supermarkets who both turn over around $60 billion per annum. They are so large, if they sneeze, the trucking industry is stricken with the flu. The retailers don’t need to act like a bully, their sheer size makes them equivalent to a bully

 

As long as the bickering between various parties continues the big retailers can carry on their merry way in blissful ignorance, prices will fall and the pressure on suppliers will rise, setting off another round of the blame game.

 

There is no excuse for a continuing battle between the transport operators, the unions and the regulatory authorities. A consensus needs to be found and presented as a united front to the big retailers otherwise we will continue with business as usual, low margins, overbearing pressure on drivers and a culture on the road where fatigue creates casualties.

 

Let’s get real!

2013 truck sales, Isuzu make it 25 in a row Food for thought in 2014

Author: Tim Giles

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