‍👉 Background: Coles and Woolworths are the big kahunas of the Australian supermarket industry with more than 65% of the market share — or as the ACCC calls them - the "oligipolies" of the supermarket world. In January 2024, the ACCC, the competition watchdog began investigating the supermarket chains, with a very real threat that they could have been forced to break up to make the supermarket industry more competitive.

‍👉 What happened: Late last week, the ACCC’s 441-page report was released as well as its 20 recommendations. In the report, the speak about how Coles and Woolworths are:

• Some of the most profitable supermarkets in the whole world
• Sitting on undeveloped land for many years to “land bank” and stop competition on their turf
• Increasing “shrinkflation” to obscure pricing transparency.

👉 What else: Buuuuut there was no recommendation to break up the big dogs - despite the ACCC’s known frustration with how the industry operates. Next minute: the share prices of Coles and Woolies both jump over 5% as their oligopoly status remains intact...for now.

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‍What's the key learning?

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‍💡Shrinkflation is when a product gets smaller but the price stays the same (or even goes up!) — like when you open a bag of chips and realise it’s 80% air and 20% regret.

💡It’s a sneaky tactic used by companies to protect their profit margins without technically increasing shelf prices. Instead of charging more for a block of chocolate, for example, they might reduce it from 200g to 180g — hoping consumers won’t notice the change.

💡But the double whammy is even worse. A real example is Jif bathroom cleaner which was $2.50 for 700ml in 2022, but by 2024, it was $4 for 500ml — that’s 60% more expensive for 40% less Jif. And the ACCC ain’t happy about this one little so they want clearer labels so shoppers aren’t bamboozled at the checkout.