Welcome to Fearing Greed Business Interview. I'm Sean Almam. There are some fascinating things happening right now in consumer brands. The cost of living is driving more customers to Aldi, for example, but could that also have something to do with the atable Sea action against coals and woolies. What impact is the perception of powers scourging and even shrink flation having on where customers shop and in the online space. The arrival of Team Who last year has caused a major upset, passing eBay in the market chair for the first time. So what's this mean for consumers and for local online players like Cogan and The iconic consumer data and research company FONTO has a remarkable insight into consumer brands in Australia. Ben Dixon is CEO of FONTO. Ben, welcome to Fear and Greed.

Welcome to Fearing Greed Business Interview. I'm Sean Almam. There are some fascinating things happening right now in consumer brands. The cost of living is driving more customers to Aldi, for example, but could that also have something to do with the atable Sea action against coals and woolies. What impact is the perception of powers scourging and even shrink flation having on where customers shop and in the online space. The arrival of Team Who last year has caused a major upset, passing eBay in the market chair for the first time. So what's this mean for consumers and for local online players like Cogan and The iconic consumer data and research company FONTO has a remarkable insight into consumer brands in Australia. Ben Dixon is CEO of FONTO. Ben, welcome to Fear and Greed.

Thanks Sean, pleasure to be here.

Thanks Sean, pleasure to be here.

Before we start talking about the Aldi's and the teams of the world, how do you get your information? Up front?

Before we start talking about the Aldi's and the teams of the world, how do you get your information? Up front?

It's quite in the way we've approached it. We've got eighty thousand adult Australians who surely share their spending data every day and then an extra money every week doing surveys based on their actual transactions, So really robust way of saying we know who you are, we know where you're spending. And by the way, if you want to tell us why, we can intercept you and reward you for doing that. So as I say, eighty thousand in our community who do that week to week.

It's quite in the way we've approached it. We've got eighty thousand adult Australians who surely share their spending data every day and then an extra money every week doing surveys based on their actual transactions, So really robust way of saying we know who you are, we know where you're spending. And by the way, if you want to tell us why, we can intercept you and reward you for doing that. So as I say, eighty thousand in our community who do that week to week.

Big numbers. Let's start with the supermarkets. What's going on there? How perceptive of customers when it comes to the whole HABLEC action on prices? Is it more of a cost of living thing? What's going on?

Big numbers. Let's start with the supermarkets. What's going on there? How perceptive of customers when it comes to the whole HABLEC action on prices? Is it more of a cost of living thing? What's going on?

Look, it's an interesting one. We've obviously tracked in it and interestingly, Odie's grown two percent in the last twelve months. When we look at where it was twelve months ago is about nine point six percent. Twelve months later, it's about eleven point five percent, So it's growing quite nicely and probably cost of living driving that. But also what we did is we went out to all our members to see what the actual impact was likely to be on misleading prices or price scouting, whichever you want to call it. And then shri inflation and lastly the triple C action that's going on and keeps coming up in the press, and what we found was that about seventy percent had noticed the misleading prices or the price gouging. About eighty percent or eighty one percent had noticed or experienced shrinkflation.

Look, it's an interesting one. We've obviously tracked in it and interestingly, Odie's grown two percent in the last twelve months. When we look at where it was twelve months ago is about nine point six percent. Twelve months later, it's about eleven point five percent, So it's growing quite nicely and probably cost of living driving that. But also what we did is we went out to all our members to see what the actual impact was likely to be on misleading prices or price scouting, whichever you want to call it. And then shri inflation and lastly the triple C action that's going on and keeps coming up in the press, and what we found was that about seventy percent had noticed the misleading prices or the price gouging. About eighty percent or eighty one percent had noticed or experienced shrinkflation.

So just we better say shrink flation is the idea that what you're buying for a unit is getting smaller as opposed to a price falling.

So just we better say shrink flation is the idea that what you're buying for a unit is getting smaller as opposed to a price falling.

That's exactly right. So whether it might be a particular chocolate bar or a bag of chips, we're seeing a smaller amount but roughly at the same price, exactly right. Okay, yeah, So what we're seeing is for those people in grocery shopping who are noticing those things like price gouging and shrinkflation, they're saying, or about sixty eight percent of them are saying that they will change their grocery shopping habits to the independence or to ANALDI and for a triable C. About seventy two percent of them said, we've noticed the ah triable C. We understand what that's about, and that's going to help us change their behavior. So what we're now doing is all those people who said they would change, they actually going to change. So we did that in October, will release our first real change numbers in early December, and they will do that monthly after that, just to see if what people say they will do they actually do do.

That's exactly right. So whether it might be a particular chocolate bar or a bag of chips, we're seeing a smaller amount but roughly at the same price, exactly right. Okay, yeah, So what we're seeing is for those people in grocery shopping who are noticing those things like price gouging and shrinkflation, they're saying, or about sixty eight percent of them are saying that they will change their grocery shopping habits to the independence or to ANALDI and for a triable C. About seventy two percent of them said, we've noticed the ah triable C. We understand what that's about, and that's going to help us change their behavior. So what we're now doing is all those people who said they would change, they actually going to change. So we did that in October, will release our first real change numbers in early December, and they will do that monthly after that, just to see if what people say they will do they actually do do.

I mean, I look forward to seeing those numbers because it is very cool. Different banks were a great example of a few years ago. Supermarkets are getting it now. I dare say super funds might get it in the future. But this whole idea that regulatory concern and allegations can really hit consumers, it surprises me that it hits them as hard as it does been.

I mean, I look forward to seeing those numbers because it is very cool. Different banks were a great example of a few years ago. Supermarkets are getting it now. I dare say super funds might get it in the future. But this whole idea that regulatory concern and allegations can really hit consumers, it surprises me that it hits them as hard as it does been.

Yeah, look, I think it's important to note those people who will also take more notice of these things when we look at regulatory concerns. And interestingly, for ALDI, their biggest growth is coming from gen Z. Gen Z have seen a thirty four percent growth in ALDI over the last twelve months. Whereas you look at your baby boomers, who may be more set in their ways or they're more secure about going to their local major grocery store, it's only been about four percent. So I think when you see something repeat in the press and it becomes subliminal for you, then certainly you can talk about change. But then I think people start to change.

Yeah, look, I think it's important to note those people who will also take more notice of these things when we look at regulatory concerns. And interestingly, for ALDI, their biggest growth is coming from gen Z. Gen Z have seen a thirty four percent growth in ALDI over the last twelve months. Whereas you look at your baby boomers, who may be more set in their ways or they're more secure about going to their local major grocery store, it's only been about four percent. So I think when you see something repeat in the press and it becomes subliminal for you, then certainly you can talk about change. But then I think people start to change.

Okay, let's get into TEAMU. This is another generation. My daughter, who's sixteen, loves Tamu. She's forever asking me to sign up to Timu and do different things because she gets ten free presents. My partner Jackie's just jumped onto TEAMU as well. Man, it's flooding the online world.

Okay, let's get into TEAMU. This is another generation. My daughter, who's sixteen, loves Tamu. She's forever asking me to sign up to Timu and do different things because she gets ten free presents. My partner Jackie's just jumped onto TEAMU as well. Man, it's flooding the online world.

Yeah, and it's a really interesting one because people talk about concerns about overseas ownership and those sort of things. And look, Amazon still dominates this category. They've got a forty nine percent market share, but TEAMU for the first time, and they've done a good job of promoting super cheap or even free as you say, products when you join. They walked past eBay sitting at seventeen percent, and Team who finally hit twenty percent. We've seen this coming for a while, and interestingly, EBA's been in a bit of a decline for quite a long time, in fact, more than two or three years as we've been measuring it. But also when you look at the power that Timo has had on the market, COG and the iconic Catch and a few of those are also in albeit modest decline as well, and that's been happening since early twenty twenty three. So yeah, it's certainly one that's having and then we've got shut Shine or Shan I'm not sure exactly how you pronounce that coming online as well, and that looks like it will be big. So it's a crowded market, this online retail space.

Yeah, and it's a really interesting one because people talk about concerns about overseas ownership and those sort of things. And look, Amazon still dominates this category. They've got a forty nine percent market share, but TEAMU for the first time, and they've done a good job of promoting super cheap or even free as you say, products when you join. They walked past eBay sitting at seventeen percent, and Team who finally hit twenty percent. We've seen this coming for a while, and interestingly, EBA's been in a bit of a decline for quite a long time, in fact, more than two or three years as we've been measuring it. But also when you look at the power that Timo has had on the market, COG and the iconic Catch and a few of those are also in albeit modest decline as well, and that's been happening since early twenty twenty three. So yeah, it's certainly one that's having and then we've got shut Shine or Shan I'm not sure exactly how you pronounce that coming online as well, and that looks like it will be big. So it's a crowded market, this online retail space.

Amazon just quickly mentioning them because in the last couple of weeks the boss of Coals I think it was, it might have been Willis, but we're talking about it's a very competitive market, and I think the example they used was toilet paper, where people are buying toilet paper off Amazon. Amazon is a real gorilla, and it's seemingly it's getting its technacles. Not the gorillas have technacles, octopus tchnacles, you know what I'm saying, into more and more parts of the economy.

Amazon just quickly mentioning them because in the last couple of weeks the boss of Coals I think it was, it might have been Willis, but we're talking about it's a very competitive market, and I think the example they used was toilet paper, where people are buying toilet paper off Amazon. Amazon is a real gorilla, and it's seemingly it's getting its technacles. Not the gorillas have technacles, octopus tchnacles, you know what I'm saying, into more and more parts of the economy.

And interestingly, Amazon has an average of about three point five purchases per customer as opposed to two point eight from Timo. So people are more loyal, more frequent at Amazon. But the breadth of what you can get there is almost unlimited today as you say, so, and team who has a smaller and probably driven by how cheap things are on there, but the average basket size or purchase amount on the team who is forty two dollars, which is much lower than on some of the other online retailers.

And interestingly, Amazon has an average of about three point five purchases per customer as opposed to two point eight from Timo. So people are more loyal, more frequent at Amazon. But the breadth of what you can get there is almost unlimited today as you say, so, and team who has a smaller and probably driven by how cheap things are on there, but the average basket size or purchase amount on the team who is forty two dollars, which is much lower than on some of the other online retailers.

Say with me, Ben, we'll be back in a minute. I'm speaking to Ben Dixon, chief executive of FONTO. There must be a bunch of delivery companies making money out of this, or are they actual team who people doing the delivery in lost leading or I don't understand the delivery part of it.

Say with me, Ben, we'll be back in a minute. I'm speaking to Ben Dixon, chief executive of FONTO. There must be a bunch of delivery companies making money out of this, or are they actual team who people doing the delivery in lost leading or I don't understand the delivery part of it.

Yeah, look, and it's not something we track as such, but I can tell you that there are enormous infrastructures now set up for delivery. I can order at four pm on any given afternoon and have my Amazon parcel delivered at eight am the next morning, which seems almost impossible given they've got to go and source it from a distribution center and get it packed and to you and to the right person. So there's an enormous amount of infrastructure gone into getting that right and getting the technology systems behind that as rapid as they have.

Yeah, look, and it's not something we track as such, but I can tell you that there are enormous infrastructures now set up for delivery. I can order at four pm on any given afternoon and have my Amazon parcel delivered at eight am the next morning, which seems almost impossible given they've got to go and source it from a distribution center and get it packed and to you and to the right person. So there's an enormous amount of infrastructure gone into getting that right and getting the technology systems behind that as rapid as they have.

So in terms of the online space team, who's doing World Sheen whatever it is, is doing well. Amazon's Amazon, But then some of the others like Cogan, Iconic, some of those are probably struggling a touch.

So in terms of the online space team, who's doing World Sheen whatever it is, is doing well. Amazon's Amazon, But then some of the others like Cogan, Iconic, some of those are probably struggling a touch.

I think they're getting hurt by the probably literally by the pricing approach that's been taken by the team and machines for sure.

I think they're getting hurt by the probably literally by the pricing approach that's been taken by the team and machines for sure.

Okay, the one I'm really interested in is coffee. I am an absolute coffee snob, no doubt about it. Happy to say that. Having said that, it's funny when you're traveling, particularly with kids, and you go to McDonald's, you go to the McCafe brand and it's actually pretty good coffee. Like, as a snob, I'm happy to have a McCafe coffee when traveling. What about I mean, where does the cafe sit with the independence, what about the budget friendly options like nest cafe at home? And this is with a background which we've been talking about here and greed of coffee prices going through the roof, so that will actually flow through to consumers at some point out of the next twelve months. Where are we up to in the coffee wars?

Okay, the one I'm really interested in is coffee. I am an absolute coffee snob, no doubt about it. Happy to say that. Having said that, it's funny when you're traveling, particularly with kids, and you go to McDonald's, you go to the McCafe brand and it's actually pretty good coffee. Like, as a snob, I'm happy to have a McCafe coffee when traveling. What about I mean, where does the cafe sit with the independence, what about the budget friendly options like nest cafe at home? And this is with a background which we've been talking about here and greed of coffee prices going through the roof, so that will actually flow through to consumers at some point out of the next twelve months. Where are we up to in the coffee wars?

Yeah? Interesting, and that's exactly how we refer to it as coffee was And we work very closely in the QSR sector and there's absolutely no doubt that the amount of time and investment and money put into selecting the right beans, selecting the world's best coffee machine and training four to five hundred barristas and then sitting them in drive through outlets and charging four dollars of coffee is having an impact. It certainly is, because the coffee is actually quite good. Yeah, people have been trained how to deliver it and you don't have to get out of your car, and that suits a lot of people. And then at the other end of the scale, as you say, cost of being pressures mean nest Cafe Blend forty three is probably having a honeymoon period surely as well.

Yeah? Interesting, and that's exactly how we refer to it as coffee was And we work very closely in the QSR sector and there's absolutely no doubt that the amount of time and investment and money put into selecting the right beans, selecting the world's best coffee machine and training four to five hundred barristas and then sitting them in drive through outlets and charging four dollars of coffee is having an impact. It certainly is, because the coffee is actually quite good. Yeah, people have been trained how to deliver it and you don't have to get out of your car, and that suits a lot of people. And then at the other end of the scale, as you say, cost of being pressures mean nest Cafe Blend forty three is probably having a honeymoon period surely as well.

Surely nice.

Surely nice.

Yeah, but everyone, everyone seems to be pulling the strings. So if you look at Warworst Metro, you spend more than thirty dollars in there, you get a free coffee and their coffee is quite good as well. Coffee Club and those sort of things have their loyalists in their shopping centers where people go all the time. And it's interesting with Starbucks, we definitely see that being or embrace them very loyal in the younger cohort, probably because of the flavors and the sweeter offers and those sort of things. And Starbucks isn't cheap, but it definitely resonates with the lower age groups. As we go through. But I think what's difficult is there's an independent cafe on most corners. They've got a two day economy being Saturday and Sundays where they're mostly flooded. But for the rest of the week they've got to compete with all of these other things going on, and it must be very tough out there for them. We're seeing certainly a lot of tightening for that sector, but yeah, it's definitely coffee wars at the moment.

Yeah, but everyone, everyone seems to be pulling the strings. So if you look at Warworst Metro, you spend more than thirty dollars in there, you get a free coffee and their coffee is quite good as well. Coffee Club and those sort of things have their loyalists in their shopping centers where people go all the time. And it's interesting with Starbucks, we definitely see that being or embrace them very loyal in the younger cohort, probably because of the flavors and the sweeter offers and those sort of things. And Starbucks isn't cheap, but it definitely resonates with the lower age groups. As we go through. But I think what's difficult is there's an independent cafe on most corners. They've got a two day economy being Saturday and Sundays where they're mostly flooded. But for the rest of the week they've got to compete with all of these other things going on, and it must be very tough out there for them. We're seeing certainly a lot of tightening for that sector, but yeah, it's definitely coffee wars at the moment.

What I find interesting with the coffee is, I mean, I have a coffee mache at home, which theoretically you know I'm going to use. I never do because I actually like the whole process of walking to the cafe, saying hello to the brister. I'm live in a community, so you know often you might run into someone you know having a chat. That whole thing to me is as important to me as the coffee itself. And you don't get that in the cafe. You don't get that in Starbucks.

What I find interesting with the coffee is, I mean, I have a coffee mache at home, which theoretically you know I'm going to use. I never do because I actually like the whole process of walking to the cafe, saying hello to the brister. I'm live in a community, so you know often you might run into someone you know having a chat. That whole thing to me is as important to me as the coffee itself. And you don't get that in the cafe. You don't get that in Starbucks.

And Sean, I think you're dead right when we hear and we walk the streets on the weekend as well, and the cafe is our packed because I think, like you, most Australians love a way of socially interacting. Again, a lot of that has gone in our day to day workplace, et cetera. So being able to go to a cafe and spend time and drink good coffee and obviously eat some stuff as well is very important to Australians. So it's about how do you maximize your two day economy if you're a local, independent cafe, knowing that some of the other part of your week is going to be eaten up by the larger players.

And Sean, I think you're dead right when we hear and we walk the streets on the weekend as well, and the cafe is our packed because I think, like you, most Australians love a way of socially interacting. Again, a lot of that has gone in our day to day workplace, et cetera. So being able to go to a cafe and spend time and drink good coffee and obviously eat some stuff as well is very important to Australians. So it's about how do you maximize your two day economy if you're a local, independent cafe, knowing that some of the other part of your week is going to be eaten up by the larger players.

Before we go the report that's coming out early next month, which one has it been on the supermarkets? Oh?

Before we go the report that's coming out early next month, which one has it been on the supermarkets? Oh?

Yes, So we're going to see whether people have actually changed their behaviors or not, looking all those people who who said they would shift from the two major grocery buyers across through ality all the independent So we're going to track where we are tracking that very closely. So certainly we'll have that for you early next month.

Yes, So we're going to see whether people have actually changed their behaviors or not, looking all those people who who said they would shift from the two major grocery buyers across through ality all the independent So we're going to track where we are tracking that very closely. So certainly we'll have that for you early next month.

Early next month. I look forward to it. Ben, thank you very much for joining us on Fear and Greed.

Early next month. I look forward to it. Ben, thank you very much for joining us on Fear and Greed.

Thanks Sean, appreciate your time.

Thanks Sean, appreciate your time.

That was Ben Dixon, CEO of FONTO. This is the Fear and Greed Business Interview. Join us every morning for the full episode of Fear and Greed. Daily business news for people who make their own decisions. I'm Seanie elma Enjoy your day.

That was Ben Dixon, CEO of FONTO. This is the Fear and Greed Business Interview. Join us every morning for the full episode of Fear and Greed. Daily business news for people who make their own decisions. I'm Seanie elma Enjoy your day.