Wednesday, 22 August 2007

ACCC links discount fuel vouchers and increase grocery prices

Today, I read an article in The Age newspaper regarding a report by the ACCC of an increase in groceries' pricing by Coles and Woolworths due to fuel discount vouchers. If the report is true, then it supports the an observation that I have had over a number of years.

I have noticed that if the petrol station is near an affiliate supermarket, the price of the groceries from that supermarket is inflated to cover the cost.

In Australia, if you spend more than a threshold, typically $30, in a single transaction, you are entitle to a discount to an affiliate petrol station. The discount is usually 4 cents/litre, up to a maximum of 150 litres.

I have always had a suspicion that if the supermarket is attached to a service station, the cost of the groceries is higher to cover the cost of the discount. I was not able to detect the price increase. I feel that the pricing has only be very slightly increased, and is amortise over a period of time.

In some ways, I should be shopping at one of the other independent supermarkets like Foodworks or Ritchies. However, even these independent supermarkets are also offering fuel discount vouchers. So you cannot really escape it.

Assuming that all supermarkets has the same practice, it is almost compelling that you visit the affiliate petrol station so that the savings could be recuperated. If not, the supermarkets wins.

I have previous written about the discount fuel vouchers here.


Kin said...

I have found the same thing. The problem is by shopping (where I live anyway) at smaller, independant supermarkets, you're paying more anyway, because the smaller supermarkets don't have the purchasing power of the larger chains.

We are lucky (tongue in cheek) that we have two supermarket chains, but only one petrol station that accepts fuel vouchers. I have watched the prices go up in one supermarket to the point I can't justify shopping there, even after the discount!

The same bag of groceries at both supermarkets is different by $10-$15

Louise said...

I agree, I am now shopping at Aldi for most things, and then I get my $30 worth of products(usually specials) at Woolies and my petrol voucher once a fortnight.

Luckily the town I work in has cheper petrol than where I live so if I use the voucher there it is up to 11cents a litre cheaper than without the voucher.