[LINK] Grocery Choice - what's the problem?

David Boxall david.boxall at hunterlink.net.au
Mon Jun 29 16:35:34 EST 2009

If I'm not mistaken, the supermarkets that would have been involved in 
Grocery Choice use scanners. For that, they'd need back-end databases of 
products and prices. Once set up, transmitting part or all of that data 
to Grocery Choice should cost zero (or near to it). Coles reckons it 
would cost $8 million a year to do it twice per week (8 million/104 = 
$76,923 - what were they planning to do? Tattoo prices, one-by-one, on 
the buttocks of forked-stick messengers?).

I obviously have a lot to learn. Perhaps someone on Link can enlighten me.

How Grocery Choice was ushered to the grave

    * Phillip Coorey
    * June 29, 2009

The Government might have taken some stick at the weekend for abolishing 
the Grocery Choice website, but it pales against what it would have 
experienced had the project gone ahead.

As critics of Friday's decision stamp their feet and demand inquiries, 
there are sighs of relief within the Government and cries of "I told you 
so" from elsewhere.

Grocery Choice was due to be launched on Wednesday.

Ideally, shoppers would go online, compare the prices of thousands of 
products at various supermarkets, and then head off to where the basket 
of goods added up to be the cheapest.

In reality, it would have been nothing like that and the Government 
would have been inundated with complaints between now and the next 
election about the website providing false information.

Grocery Choice was a spin-off of Kevin Rudd's pre-election empathy with 
voters over the cost of living.

A Rudd government could not mandate lower grocery prices but it would 
enhance competition, went the mantra.

(The Government has committed to introduce unit pricing and change 
planning and foreign investment laws to allow more players like Aldi 
into the market).

After the election, the website concept began as Grocery Watch. It was a 
disaster, so the Government gave the task to the consumer watchdog, 
Choice, with $13 million to make it happen.

Choice was billing the site as giving consumers up-to-date information 
on 1000 products, rising to 5000.

Inside the Government, it was soon realised the information was never 
going to be up-to-date but out-of-date and inaccurate.

The supermarkets contended the IT systems to provide such information on 
an instant basis do not exist.

Woolworths, like almost every other supermarket chain, was not rushing 
to embrace Grocery Watch. Woolies has about 800 supermarkets in 
Australia. Prices for goods vary from location to location, depending on 
the suburb the supermarket is in and whether a supermarket is in a price 
war with a nearby competitor.

The prices for some goods, especially fresh produce, can change in the 
same day and vary from suburb to suburb.

Woolies offered to provide, twice a week, an average price for products.

For example, on Fridays it would tally how many cans of Coke had been 
sold in recent days and how much money had been received for that Coke. 
It would then divide the number of cans sold by the money received and 
release an average price.

That average would be higher than what a can of Coke cost in some 
outlets and lower than in others. It would also be old information.

Others had different problems. IGA, for example, is a franchise. A small 
local operator would have neither the technology nor the time to funnel 
through to Choice on a regular basis the prices of thousands of goods. 
There were also legal ramifications to consider should the pricing not 
be exact.

Ultimately, Aldi and FoodWorks were the only supermarkets prepared to 
try and make it work.

Choice argues the big supermarkets could have provided real-time price 
information for each location using the data scanned in at the checkout. 
Choice says the cost would be negligible. Coles argued that just 
providing twice-weekly average pricing would have cost it $8 million a year.

Whatever the case, the Government knew that in the end it would wear the 
opprobrium. Chris Bowen had been the minister charged with trying to 
make Grocery Choice work. Upon his elevation to cabinet this month, the 
new Consumer Affairs Minister, Craig Emerson, found himself the 
recipient of the hospital pass.

Emerson, alarmed at the brinkmanship, called all the players to his 
office on Friday to gauge whether they were in or out.

Word of the meeting was sent out Wednesday. Choice didn't show up, 
citing it was too busy putting the finishing touches on the website.

At the meeting, it became apparent that even if the website was launched 
Wednesday, its information would be neither complete nor accurate.

Prices would have asterisks attached indicating they were averages only 
but the shoppers would not notice that. They would blame the Government, 
not Choice or the supermarket.

Michael Jackson was dead and, Emerson concluded, so was Grocery Watch. 
Emerson knew he would be accused of trying to hide bad news behind 
Jackson, so he issued the press release as soon as possible on Friday so 
it made the evening news. He was canned anyway.

Grocery Choice was an example of a big promise which was always going to 
be difficult, if not impossible, to deliver.

-- Quote ends --

I wonder whether many shoppers would take advantage of the data on 
Grocery Choice. Putting the information in the public domain might, 
however, motivate the supermarkets to keep prices down. Perhaps that's 
the real problem.
David Boxall                    |  When a distinguished but elderly
                                |  scientist states that something is
http://david.boxall.name        |  possible, he is almost certainly
                                |  right. When he states that
                                |  something is impossible, he is
                                |  very probably wrong.
                                                   --Arthur C. Clarke

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