The ultimate supermarket: Walmart

If you didn’t already know, the supermarket, Walmart is the largest company based on revenue in the world; approximately $480 billion in annually. No small feat.

What may surprise you is that it is family-owned, and they’re extremely wealthy. Take it this way – if Walmart were a country, it would be the 28th richest in the world. The six heirs to the Walmart throne also have a net worth BIGGER than the bottom 40% of the US population. That’s six people having more moolah than 129,200,000 Americans. It’s flippin’ insane.

Walmart Supermarket - the largest corporation on the globe
Photo credit: Fortune.com

But here’s the real crazy part… Walmart – the company with the most employees in the entire world, pays their employees pittance. Such a pittance in fact – that it asks its customers to help provide food for its employees. Their employees earn a median wage of $8.80 per hour. Those same employees then rely on US government food stamps, which costs collective taxpayers’ money. Those same taxpayers then rejoice in the savings they recoup when shopping at Walmart, served by the staff living in poverty.

It’s mind-boggling, really.

Now, granted, the US does everything bigger, and the examples such as these are evidence of such. But what these examples do, however, is provide us with a case study.

Australia’s supermarket kingpins

Let us consider Australian supermarkets – an industry worth $90.3 billion. Woolworths and Coles each have about a 35% stake, followed by Aldi around 13%, and IGA around 9%. That’s four companies controlling around a 91% stake. Likely, the majority of us shop at these chains. They’re convenient and just about everywhere. But are there implications to capitalist concentration?

Yes, yes there is.

First is the lack of diversity. As these rapacious companies continue to extend their market share, we will continue to see less and less of the brands we’ve come to know and love. Just take a quick sec to visualise the supermarket shelves of just a few years ago. Are they filled with a myriad of brands, possibly crippling you from too much choice? Perhaps there was some Woolworths Homebrand or Select or Coles Smart Buy nestled among the Heinz, Rosella, Arnotts, Cottees, SPC and so on and so on. Nowadays, however, Woolworths and Coles branded items are the kingpins of the supermarket shelves.

Italy is the world's second largest tomato producer.
Italy is the world’s second largest tomato producer. Here is a photograph of their tomatoes crossing the border to Ghana, crippling the local tomato industry. These displaced workers then cross over to Italy, to then be exploited in the industry there. Photo credit: Journalism Grants/The European Journalism Centre

Finding Australian made products on supermarket shelves

This hit me square in the face when I tried to buy Australian made and canned diced tomatoes. Or at the very least Australian owned, preferably by a smaller label just because sometimes I like to frivolously throw my money towards the small guy. A fairly simple purchase, I would have thought. Wrong. Just over half of the available cans were supermarket brand. The only other choice on Coles online is Annalisa (European). Woolworths offers me Ardmona, which is canned in the Goulburn Valley, right here in Australia. Yet it costs $4.39 per kilo versus Annalisa’s $2.50 versus Woolworth’s $1.50. (Woolworths and Coles source their tomatoes from Italy also).

So, in order to support local I need to pay double the cost of a can that has travelled almost 18,000 kilometres over six weeks. Where’s the logic in that? Apart from the obvious scales of economy advantage that Italy possesses, I did a little digging. Apparently, Italy often exploits illegal, migrant workers, paying far below appropriate wages subjecting them to extreme poverty (not saying that doesn’t draw comparisons with Australia). This puts a rather unsavoury taste on my diced tomatoes.

Next, I try canned sliced peaches.

  • SPC, produced in Australia: $4.24 per kilogram;
  • Dole, Asian company, produced who-knows-where (most likely California as far as I can tell): $3.70 per kilo;
  • Goulburn Valley, produced in Australia: $5.29 per kilo;
  • Woolworths, produced in Australia: $3.41 per kilo;
  • Coles, produced in Australia: $3.39 per kilo (and the only option available on their website. Gee thanks Coles for providing us any other choice).
  • Simply Fruit, made in South Africa (information very difficult to find): $2.42 per kilo

Canned slice peaches - Australian producers struggle to compete

And thus, you can clearly see a trend going on here. Coles and Woolworths are undercutting the Australian producers who are already struggling to compete against cheap imports. Their buying strategies that allow them to do this make them akin to what we Aussies call a wanker: squeezing profits away from Aussie farmers and filling up their coffers instead. This squeeze is sending our Aussie companies broke. Literally. (FYI, SPC Ardmona supplies Coles with their peaches).

Furthermore, our fancy-pants, swanky supermarkets set strict standards on the size of the peaches they will take. Thus, huge loads of beautiful peaches are simply dumped. Unloved, “unbeautiful” waste. It’s a bloody rort how much food us Aussies throw away.

We hold the ultimate power…

But all things considered, we have the buying power, and seemingly, our wallets are voting to support overseas suppliers and the undercutting of our own farmers.

In 2015, supermarket home brands comprised 15% of dry grocery goods, but are expected to be around 35% by 2020-21. I don’t know about you, but I feel sorry for the farmers who will increasingly be under pressure to reduce their profit margins, until they reach total suffocation point. And I haven’t even mentioned the duopoly’s expanding greedy reaching into other markets such as insurance, fuel servos, credit cards, clothing, homewares, and so forth.

We may be enjoying the low prices for now, but will we miss the variety when it’s gone?


FYI:

Corporations don’t really like saying where their product is made – sneaking around the Aussie-made/produced/owned labeling like it’s nobodies business. Funnily enough, I found a Kosher website had the most information on where items were made, all in one place: http://www.ka.org.au/index.php/component/option,com_kosherdb/Itemid,60/catid,149/subcatid,100/ You’re welcome 😉


References:

Other sources you may be interested in:

  • Robert Reich wrote an excellent book called ‘Supercapitalism’ https://www.facebook.com/RBReich/

Images:

Ian Baldwin