The Commerce Commission reckons we need fewer items 'on sale' at the supermarket. 

That would mean less yoghurt on special at $4.99, fewer $1.99 chocolate bars at the checkout, and just less price yo-yo-ing in general.

This is counterintuitive. The job of Commerce Commission, through the Grocery Commissioner, is meant to score us cheaper prices and boost competition, right?

So, what the hell is going on here?

This morning, they announced they want to change the rules around what the supermarkets can charge suppliers.

Foodstuffs and Woolworths purchase $15 billion of goods from suppliers each year and control 82% of the retail market. 

When they do this, suppliers will discount prices by about $5 billion a year through rebates, discounts, and promotional payments. This ensures their stock is on sale. If they need to move a boat load of it, they can do on special and quickly, because we all love a bargain.

The Supermarket tsar says if you’re a new, smaller supermarket chain opening up, you can’t compete with that cause you don’t have the buying power and economies of scale.

Now this is where I think the tsar takes one of many leaps of faith. They reckon we consumers are overall worse off because of these specials and discounts. 

The tsar says: "Consumers lose out because prices jump around more. This can mean the average price is more expensive and it’s harder for consumers to assess the value of products.”

They don't offer any evidence this is actually happening, and that a change would make things cheaper.

Leap of faith #2 is that this saving will be passed on to the consumer via the supermarket.

Is there not a floor in this logic?

Does essentially banning discounts actually make prices cheaper?

If so, by how much? $5 billion? Remember the industry’s revenue is $25 billion a year. 

If all of the discounts were handed down the chain of command to us shoppers, we’re expected to believe general prices would fall a whopping 20%?

Remember when the Grocery Commission was set up under Labour, we were told the supermarkets were making excess profits of $365m a year. 

There's a bunch of other changes, too. 

Some of this stuff is just proposed. Suggestions. Voluntary. 

Some stuff needs consultation. Then further review. Others need 12 months. Others form part of a new report aiming for 2026.

By the time this is finished I will have not only lost the will to shop, but also to live.

The Commerce Commission reckons we need fewer items 'on sale' at the supermarket.&nbsp;
That would mean less yoghurt on special at $4.99, fewer $1.99 chocolate bars at the checkout, and just less price yo-yo-ing in general.
This is counterintuitive. The job of Commerce Commission, through the Grocery Commissioner, is meant to score us cheaper prices and boost competition, right?
So, what the hell is going on here?
This morning, they announced they want to change the rules around what the supermarkets can charge suppliers.
Foodstuffs and Woolworths purchase $15 billion of goods from suppliers each year and control 82% of the retail market.&nbsp;
When they do this, suppliers will discount prices by about $5 billion a year through rebates, discounts, and promotional payments. This ensures their stock is on sale. If they need to move a boat load of it, they can do on special and quickly, because we all love a bargain.
The Supermarket tsar says if you’re a new, smaller supermarket chain opening up, you can’t compete with that cause you don’t have the buying power and economies of scale.
Now this is where I think the tsar takes one of many leaps of faith. They reckon we consumers are overall worse off because of these specials and discounts.&nbsp;
The tsar says: "Consumers lose out because prices jump around more. This can mean the average price is more expensive and it’s harder for consumers to assess the value of products.”
They don't offer any evidence this is actually happening, and that a change would make things cheaper.
Leap of faith #2 is that this saving will be passed on to the consumer via the supermarket.
Is there not a floor in this logic?
Does essentially banning discounts actually make prices cheaper?
If so, by how much? $5 billion? Remember the industry’s revenue is $25 billion a year.&nbsp;
If all of the discounts were handed down the chain of command to us shoppers, we’re expected to believe general prices would fall a whopping 20%?
Remember when the Grocery Commission was set up under Labour, we were told the supermarkets were making excess profits of $365m a year.&nbsp;
There's a bunch of other changes, too.&nbsp;
Some of this stuff is just proposed. Suggestions. Voluntary.&nbsp;
Some stuff needs consultation. Then further review. Others need 12 months. Others form part of a new report aiming for 2026.
By the time this is finished I will have not only lost the will to shop, but also to live.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

Early Edition with Ryan Bridge

Ryan Bridge: Are supermarket sales really sales?

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/6e521213-e706-4459-9b58-b2f20129ff11/transcript