Why IGA supermarkets are so expensive

I feel sorry for IGA supermarkets because much as one wants to shop there it is simply too expensive to do so.

Before coming down to Melbourne we lived in a Brisbane suburb that had only one supermarket. It belonged to Coles and I’ve never been so frustrated by a supermarket store as I was by this one.

It was a well known fact in New Farm that prices at this Coles were high. Without competition there was no incentive to win over customers. Items were often out of stock or out of date.

So when we heard that an IGA store was going to open in the vicinity of Coles, the locals were quite excited about the prospect. The IGA opened with a fanfare. Our local member was there to launch the whole thing and I looked forward to shopping there.

I went to the IGA store a few times because I was keen to support it. However, it turned out that the ordinary grocery lines at IGA were more expensive than those at that infernal Coles, so, instead, I chose to travel a long distance once a week to do my main shopping elsewhere. The result of all this was that the local Coles supermarket lost out on my business as did the new IGA store. I was so fed up with the whole thing that I was prepared to give up on the district.

Much as IGA ads on TV promise that their prices are competitive, I have visited several of them and they can’t beat the two bigger chains .

Apparently, according to the ACCC report which I rubbished (…just a little) yesterday, Metcash, which supplies the IGA stores is responsible for charging each individual IGA store too high a wholesale price for its goods. Apparently it can’t match Woolworths’ and Coles’ wholesale prices

Now, even though the ACCC cannot do anything about the problem of Metcash, at least it has explained why IGA prices are much higher than those at Woolworths and Coles. Of course, this leaves the consumer in as bad a position as before. To understand why IGA is expensive may be beneficial, but when it comes to the hip pocket nerve, one goes for value.

As the ACCC says, we need more competition, but how can we have that when the population of Australia is so small that it does not attract the major large enterprises such as Wal-Mart? Having enjoyed shopping at several Wal-Marts in the U.S I think it would be wonderful if this chain came Downunder. Then Coles and Woolworths would have to confront real competition.

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3 thoughts on “Why IGA supermarkets are so expensive

  1. I have noticed only ALDI is the only non-australian store that is trying to attract customers by offering products at lower prices.the other stores are vying to to rip off the australian public who have no idea how cheap things are elsewhere around the world including developed countries.

    strangely expensive country to live.

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    • Pablo, you are so correct. Our food is extremely expensive and the cost of our real estate is ridiculously high. I watch TV programs about real estate and am amazed at what I could buy in the U.S.A and I’m referring to luxury homes in Beverly hills L.A for the cost of a worse house in Australia. Recently, we have been discovered by foreign companies such as H& M and Zara and Muji and Costco and our Australian retailers are complaining because they were so accustomed to overcharging us in the past. Even Ikea charges higher prices here than in other parts of the world. It is not surprising, therefore, that Australians are turning to the internet to do their shopping overseas.
      Since I wrote this article several years ago, Coles has been bought out by Wesfarmers and you can’t imagine what a difference there is now at Coles. The new management is competitive and is in the hands of people who know what they are doing. It is now a pleasure to shop at Coles. Woolworths is still more expensive in some lines but I pick and choose where I will shop. It’s all due to how the business is run. Poor management leads to poor results . It’s as simple as this.

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  2. I literally Googled “why is IGA so expensive” and this post was the first one that came up. I looked it up for the sole fact that I went to this very IGA this evening and saw a head of cauliflower for $7.99. SEVEN NINETY NINE. I don’t know which is scarier, the price of that vegetable or the coincidence that this post from 8 years ago is directly related to my situation. New Farm eh.

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