12/03/2008 - 15:38

Retail trading hours reform will boost competition, CCI

12/03/2008 - 15:38

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The claim that Western Australian shoppers pay less for food and groceries than those in other states where trading hours are not restricted is wrong, says Chamber of Commerce and Industry chief economist John Nicolaou.

Retail trading hours reform will boost competition, CCI

The claim that Western Australian shoppers pay less for food and groceries than those in other states where trading hours are not restricted is wrong, says Chamber of Commerce and Industry chief economist John Nicolaou.

Mr Nicolaou was responding to claims made by a supermarket owner on Perth radio today, that deregulation of shopping hours in WA would mean less competition and prices reaching 'Sydney levels'.

Mr Nicolaou said the latest survey of average retail prices by the Australian Bureau of Statistics showed Perth was the most expensive capital overall for food and groceries in Australia except for Darwin, which cost marginally more because of its small size and remoteness.

"This turns on the assumption that IGA stores would lose their near monopoly over evening and Sunday trading because Coles and Woolworths would be allowed to open," he said.

"The supermarket owner claimed this would lead to less competition - implying shoppers would abandon private supermarkets, which would then go out of business - and prices in Coles and Woolworths "would go up to the prices that they're charging in Sydney".

"This is a nonsensical and illusory proposition and has not been the experience in other capitals following the freeing up of trading hours."

Mr Nicolaou said prices in Sydney were cheaper than Perth, as were Brisbane, Sydney, Canberra, Melbourne, Adelaide and Hobart.

The Bureau of Statistics findings for December show a representative basket of items in Perth ranging from meat and fish to processed food and household supplies cost $240.50 - a clear $10 more than in Sydney.

Sydney was second cheapest in the nation, beaten only by Brisbane.

Except for one month (June 2005) when Hobart cost 74 cents more, the basket has cost more in Perth than any of the other states in every quarterly survey since the ABS began monitoring prices in December 2004.

Mr Nicolaou said trends in retail prices over time showed that overall prices growth has been considerably lower in other states where deregulation has been introduced- by contrast Perth retail prices growth has been higher.

"The data does not support the notion advanced by protected private supermarkets in WA that competition is lessened by opening up shopping hours to all retailers," he said.

"To argue that allowing more competition in the marketplace leads to less competition is illogical and has no proven economic basis."

Mr Nicolaou said that in any event, there were more than 20,000 retailers in Western Australia and all were affected by restrictive trading hours laws.

"This issue is not just about groceries and the competition for business between the major supermarket chains of Coles, Woolworths and IGA."

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