Coles CEO Leah Weckert flags Amazon threat at ACCC supermarkets inquiry
The chief executive of a supermarket giant has admitted she is “worried” about a US company as more and more Aussies hunt for better prices.


News.com.au
November 21, 2024

The intrusion of US tech giant Amazon into Australia’s retail market poses a serious threat to the profits of traditional supermarkets, Coles chief executive Leah Weckert says, as thousands of Aussie shoppers shift their dollars for products like nappies and dishwashing liquids to the American behemoth.

Ms Weckert, appearing before the ACCC’s inquiry into supermarket prices, said Amazon had already snatched about a $1bn in grocery sales from traditional retailers following its entry into the market in 2017.

“In the areas they are competing with us, in those ambient categories, given the growth we are seeing … this is something we are paying a lot of attention and are worried about,” she said.

Ambient categories refers to non fresh produce items such as nappies.

“The volume they are now selling is a real point of competition for us.

“The challenge we are going to have is being able to adequately compete with a two-hour delivery time out of robotics centres in Melbourne and Sydney.”

Coles chief executive Leah Weckert says Amazon is providing stiff competition to the supermarkets.

Amazon was beginning to take market share from Coles and Woolworths, Ms Weckert said.

The US giant, which boasts a market capitalisation of about $3.3 trillion compared with Coles’ $24.4bn, built a 200,000sq m robotics fulfilment centre at Kemps Creek in western Sydney, promising expedited delivery times for goods sold on its online platform

A second centre is expected to open at Craigieburn in northern Melbourne in 2025.

According to Roy Morgan research, 7.9 million Australians aged 14 years and over shopped on Amazon at least once in the 12 months to June 2024, an increase of 1.1 million customers on the previous year.


An Amazon Prime subscription also gives customers free deliveries.

Coles and Woolworths control about 67 per cent of the supermarket landscape, the ACCC has found, but Ms Weckert said Amazon’s burgeoning growth posed an ongoing competitive threat to her business.

“Our expectation is they will continue to grow and invest,” she said.

“They are likely to also expand their range over time.”i
Amazon have opened their first fully robotic fulfilment distribution centre in Australia.


In the online space, the Coles boss listed Woolworths and Amazon as her two prime competitors.

The inquiry, established by the Treasury Department in February this year, is drilling into the structure of the grocery markets across suppliers, wholesalers and retailers.

Rising prices at the checkout form a central part of Australia’s rolling cost-of-living crisis and the government, opposition and general public hold concerns the country’s concentrated supermarket space could be inflating prices.

Both Coles and Woolworths have delivered record revenues and profits in the past few years, even as consumer spending power declines in the face of rising inflation and interest rate pressures.

Ms Weckert defended Coles’ profits under questioning from ACCC lawyer Naomi Sharp SC, arguing that net profits after tax had remained flat as a percentage of total costs in the past five years.

The ACCC inquiry is drilling into whether Australia’s supermarket landscape, dominated by Coles and Woolworths, is uncompetitive.

Coles delivered $43.5bn in revenues for the 2024 financial year and $1.12bn in net profits.

The ACCC has labelled Australia’s supermarket landscape as an “oligopoly” or a market typified by a small number of dominant companies and potentially uncompetitive practices.

Ms Weckert pushed back against any assertion the market was not competitive.

“There are two large retailers and the important piece is do they compete?” she said.

“I can assure you that competition is very fierce.”

She said Coles pursued a strategy to try to “always beat” Woolworths on price

who buys groceries from Amazon

I need a new tv, cat broke the old one 😂

I can buy the tv I want for $189 on Amazon.
I can buy the same tv for $199 at my local good guys.

It’s a no brainer . I can spend $10 more and support local employment.

Competition is fantastic for customers but if you can shop local at a competitive price why wouldn’t you?