Woolworths price warning as supermarket makes little-known move: 'Dominate'
The booming industry is expected to be worth $1.9 billion in the next five years, with Woolworths making a major play at the sector this week that could be a concern for shoppers.
The supermarket giant stocks Woolworths branded meals, now including larger offerings to cater to families, and brands like Strength Meal Co, which retail for about $9.95 depending on specials.
Many wouldn't know Woolworths was cleared by the Australian Competition and Consumer Commission (ACCC) to acquire Beak & Johnston Holdings, the company that owns Strength Meal Co, on Wednesday.
Woolworths told Yahoo Finance the proposed acquisition would help meet customers' growing demand in the expanding industry.
But, there are concerns the Fresh Food People could drive costs up by blowing the rest of the competition out of the water.
RELATED
6am lines for Costco warehouse opening in $118 million move to compete with Coles, Woolworths
Woolworths cleared to make major move into $1.9 billion sector: 'Strong price competition'
Multi-millionaire's blunt retirement message for Aussies: 'Work until 90'
'While Woolworths may initially keep prices competitive to attract customers, reduced competition in the long term could lead to price increases, especially if Coles and Woolworths continue to dominate the sector,' RMIT professor of finance Angel Zhong told Yahoo Finance.
'However, Woolworths may expand its ready-made meal offerings, providing more variety and convenience for shoppers, particularly in urban areas where demand for quick meals is high.'
That could include at Woolworths' more than 100 Metro stores dotted around the country, which are smaller stores catering to shoppers looking for convenience and wanting to 'grab and go'.Zhong said the impact on consumers would depend on how Woolworths decides to integrate Beak & Johnson's products into their offerings.
'While large acquisitions can sometimes lead to higher prices due to reduced competition, Woolworths might also leverage economies of scale to keep prices competitive,' she said.
The competition watchdog found the acquisition was 'unlikely' to have a substantial anti-competitive effect and Woolworths welcomed the move.
'Woolworths has been a customer of Beak & Johnston Group (B&J) for more than 37 years with the company providing a range of popular Woolworths-branded products including lasagnes, ready meals, and pies,' a Woolworths spokesperson told Yahoo Finance.
Woolworths currently holds a minority 23 per cent interest in subsidiary and ready meal provider B&J City Kitchen.
Its acquisition is still subject to approval from New Zealand's regulator.
The ready-made meal industry has been growing in popularity as time-poor consumers look to cut back on meal preparation, with Zhong noting there had been increased demand post-pandemic due to consumers' busier lifestyles.
The biggest players in the industry are My Muscle Chef, Lite n' Easy, McCain Foods and Vesco Foods, who sell Lean Cuisine in Australia.
Coles subsidiary Chef Fresh previously purchased rival ready-made meal supplier Jewel Fine Foods in 2020, after it went into voluntary administration.
Ibisworld has forecast revenue from the prepared meals production industry to increase by 1.1 per cent over the next five years to $1.9 billion.
Woolworths told Yahoo Finance the proposed acquisition would continue its focus on meeting customers' growing demand in the 'expanding' industry.
'Customers are looking for value and convenience now more than ever, and we're seeing significant opportunity to deliver this in the ready meal category,' a spokesperson said.
Coles, meanwhile, has reported sales of 'convenient food solutions' increasing by 50 per cent over the past three years, with the supermarket finding nearly eight out of 10 shoppers decide what they will eat within a day of consumption.
Zhong said Woolworths was strengthening its position in the growing ready-made meal market and it could make it harder for smaller companies to compete with the supermarket giants.
'To stay competitive, smaller companies might need to innovate more aggressively, focusing on niche markets or unique product offerings that differentiate them from the major players,' Zhong said.
"Woolworths' acquisition could lead to changes in supply chain dynamics, potentially affecting suppliers and distributors within the sector."
Coles and Woolworths currently control around 65 per cent of Australia's grocery market.
'This acquisition further entrenches their dominance, making it harder for independents like IGA, Aldi, or specialty meal providers to compete,' Zhong said.Sign in to access your portfolio
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
6 hours ago
- Yahoo
Mum exposes major issue with $5,000 baby bonus as Australia grapples with declining birthrate: 'BandAid on a gushing wound'
An Australian mum has highlighted how the government's baby bonus would have to be much, much higher if it were introduced in 2025. Former Prime Minister John Howard recently floated the idea of bringing back the $5,000 handout to fix the country's lagging birth rate. The policy was introduced in 2004, and there was a noticeable lift in the number of babies being born while the subsidy was around. But Sydney resident Arabella told Yahoo Finance that a few thousand dollars would do very little to help families in the current economic environment. "I feel like our parents' generation, it was expected to have children and no one questioned, and they made it work," she said. RELATED Families eligible for $11,400 cash boost under federal budget childcare change Hidden $3,000 per year cost of cashless revolt as record number of banknotes hoarded Huge push for four-day work week to become reality for all Australians "But costs aren't the same now. "Everyone wants to argue that they didn't earn as much, but everything didn't cost as much. "University education was also free back then, not like it is now, where HECS debts are being indexed far past what any contribution that the person makes during the year. "These are all issues, and we're ignoring all of them." She called the concept of a baby bonus a "quick fix" that could lure vulnerable or low-income couples into having a child without considering the true cost that comes with that was the baby bonus? Howard lashed previous governments for getting rid of the baby bonus, which started at $3,000 per child and peaked at $5,437 in 2012, before being gradually lowered. At one point, it was indexed to inflation, meaning it would keep pace with the rising cost of living. It also started as a lump sum payment, but was changed in 2009 to be 13 fortnightly instalments. Then-Treasurer Peter Costello's catchphrase for the bonus when it was introduced was for parents to 'have one for mum, one for dad and one for the country". Why are there calls for the baby bonus to come back? Australia's birth rate is currently at 1.50 babies per female, which is a record low, and it's been on a downward slide in recent years. The previous low was recorded in 2020 at 1.59 babies per female, and the rate needs to be at 2.0 to be in the "replacement" phase, which means the two newborns would replace their parents. Back in 2004, the rate was at 1.7 newborns, and the replacement rate was achieved by 2008. In 2022, there were 300,684 babies born. But in 2023, there were only 286,998 babies born. Howard said the current birthrate has hit a "disturbing and depressed level" and believed the baby bonus needed to be brought back to its former glory. Would $5,000 be enough for a family in 2025? Even if you adjusted the maximum payout for inflation in our current time, a reimagined baby bonus would only be $7,463 per child. Arabella had her first child nearly a decade ago, and she said times are very different now compared to then. "The reason [the birth rate] is dropping is because... of the financial and economic implications of having children, other than the fact that there are social and environmental concerns about what world we're bringing kids into," the 34-year-old said. "We're not talking about the cost of living, and just how expensive living is generally, or how expensive housing is, and the fact that we have a housing crisis. "We're not talking about the fact that daycare can cost anywhere between $2,000 to $8,000 per year, out of pocket, per child. "Then there's also career impacts of having a child, and superannuation impacts, which can then affect retirement." While she's discussed having a second child with her partner, they've admitted the numbers didn't stack up, and a newborn would put far too much financial pressure on them, which is a concept shared by many other parents or wannabe parents in her circle. When asked how much a baby bonus would have to be to adequately help a family or parent in 2025, she admitted it was difficult to say. Demographer Mark McCrindle put the number at $12,000. How much does it cost to have a child? It's a tough number to produce because there are so many factors that go into conceiving a child, the birth, and decisions made about raising the newborn once the child in the world. Consumer group Finder looked at several studies and said one child can cost between $159,120 to $548,500 over 18 years. Having two children could cost between $474,000 and $1,097,000 over the same period. Those ranges depended on the socio-economic conditions in that household, which was split into three categories of low, middle and high income. Finder's 2023 report found that hospital costs for the pregnancy alone can be between $726 and $2,400, depending on whether you go public or private. Arabella told Yahoo Finance she opted for private for her son, which she admitted was a "luxury", and said just her obstetrician fees were $4,500. Suncorp's 2021 study found food was the biggest expense for a child, averaging out to be $401 per month per child. Educational costs ($386), housing ($321), savings and contingencies ($318), and transport ($232) also featured highly. In total, each child costs around $3,044 per month, or $36,528 per year. Hidden aspects of having a child that can cost dearly Arabella said her family was currently paying $640 per week for her rental, but explained how they would be forced to get somewhere bigger (and more expensive) to accommodate another child. Then there's the ongoing concern that their landlord could hike their rent every year if they wanted to. The Sydney mum also pointed out how taking a year off work to raise a child can have significant implications for your retirement. Up until July 1 this year, families might have been able to access the government's paid parental leave (PPL) scheme and their own employer's maternity and paternity leave. However, no law required businesses to pay into your super during this time, and the PPL didn't have any contributions either. The start of the new financial year saw the maximum PPL allowance rise from 22 weeks to 24 weeks, and the government will now pay 12 per cent of that to your super. Finder said women typically lose $44,906 in income when they have a child and $4,580 in employer superannuation. By the time you retire, that lack of super during your time off will have ballooned to $46,979 in lost wealth. For men, that loss is much less pronounced at just $5,693 by retirement. Arabella told Yahoo Finance it's hidden aspects like this that might not be immediately factored in when tallying up how much having a child truly costs. China and the US introduce baby bonuses While Australia mulls the idea of resurrecting the baby bonus, other countries are pushing ahead with it. In China, couples or parents will receive $768 per year for every child under the age of three. While over in the US, Donald Trump's proposed "big beautiful bill" includes a deposit of up to $5,000 for households with a newborn. But Aussies on social media felt we should steer clear. "This is a Band-Aid on a gushing wound. We need affordable housing, job security and flexibility," one person said. "It's a dumb policy why incentivise people who can't afford children to have them and not fix the actual issue," another added. "Modern life under capitalism is a waking nightmare of ultra-convenience combined with lack of connection, community and purpose. Fix that, then human beings might start having kids again," a third in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
7 hours ago
- Yahoo
Jobs safest and most at risk of AI takeover as Australia begins major transition: 'Opportunity'
Aussies who are worried about artificial intelligence (AI) taking over their job may want to consider picking up a trade or a job in nursing and steer clear of administrative and clerical jobs, new research has found. AI will have an impact on almost all occupations in Australia; however, for most people, it will change rather than replace their jobs. A 'landmark' new study by Jobs and Skills Australia has found generative AI has the capacity to augment a wide variety of tasks and most occupations. Commissioner of Jobs and Skills Australia, Professor Barney Glover, said it presents both opportunities and challenges. 'There is a tremendous opportunity for Australia and our workforce to boost our productivity and create new ways of working,' he said. RELATED Microsoft reveals 40 jobs most and least likely to be affected by AI Hidden $3,000 per year cost of cashless revolt as record number of banknotes hoarded Brisbane's Ekka Show responds after $55 burger sparks fury 'As a nation, we need to be conscious that generative artificial intelligence has the potential to augment the work we do, as well as to automate some tasks. 'This has the potential to displace people in some jobs, particularly administrative and clerical roles.' Glover said the impact of AI would differ across geographical location, industry and occupation, and would change over time as emerging technologies further change the way we work. 'Adaptability will be critical for Australia to realise the potential benefits from AI, which will see new jobs emerge and existing jobs change,' he said. A poll of more than 2,600 Yahoo Finance readers found 41 per cent of readers were worried their job would soon be overtaken by AI, with 7 per cent saying it already had been. The report comes at a "critical early point" in our transition towards generative jobs are most at risk from AI? Office clerks, receptionists, bookkeepers, sales, marketing and public relations professionals, and business and systems analysts and programmers would lose the most employment by 2050, the report found. In comparison, cleaners and laundry workers, midwives and nurses, business administration managers, construction and mining labourers, and hospitality workers would gain the most. 'Many clerical tasks – that were not affected by previous waves of automation – could now be undertaken in large part by Gen AI,' the report said. 'Higher skill levels reveal greater exposure to medium automation potential, suggesting highly skilled occupations could discover new efficiencies based on the current technology.' Around one in five occupations had a 'medium to high likelihood' of automation by AI. But nearly half of workers were in jobs with low automation and medium augmentation, which the report said means they were likely to experience 'change rather than disruption'. More businesses adopt AI Gen AI adoption is still at an early stage in Australia, but it has increased significantly in the last two years. In 2024, the vast majority of ASX200 mentioned investing in technology, with more than half mentioning AI-related investments. Some companies are focused on improving interactions with customers through things like chatbots, while others are streamlining internal processes or enhancing their existing offers. Commonwealth Bank recently announced it was axing dozens of roles in its customer call centres, citing artificial intelligence. The major bank introduced a new chatbot system to answer simple customer inquiries in June. Telstra has said its workforce will be smaller in 2030 as it finds new ways to leverage technology, including AI. It recently cut more than 550 roles across its business but said it was 'not a result' of its adoption of AI. Tech giant Atlassian cut 150 customer service and support roles last month, noting some tasks would now be completed by AI. Fast food chains Hungry Jack's has also been trialling the use of AI drive-thru assistants, with KFC also trialling the tech last year but stressing it wasn't replacing any jobs.
Yahoo
7 hours ago
- Yahoo
Winner named in Aldi, Coles, Woolworths battle for top supermarket
Aldi has been crowned Australia's best supermarket by shoppers for the eighth year in a row. More Aussies are turning to the German discount chain to do their weekly shop as cost-of-living pressures weigh, with the supermarket sending a message to Coles and Woolworths that it 'won't be beaten' on costs. Australia's major supermarkets went head-to-head in Canstar Blue's annual Supermarket Satisfaction Ratings. Aldi was the only supermarket to earn five stars for overall customer satisfaction and value for money every year for the past eight years. Canstar Blue spokesperson Eden Radford told Yahoo Finance the group's research consistently showed shoppers wanted to save money without sacrificing what was on their shopping list. RELATED Aldi delivery warning as supermarket takes on Coles, Woolworths with online move 30,000 Aussie workers needed for Census jobs paying up to $60 per hour Huge push for four-day work week to become reality for all Australians 'Alongside that, the quality of their own-brand items reliably earn the highest rating from customers, another major reason that sets them apart,' she said. 'Consistently priced, good quality products on offer is why shoppers are choosing Aldi to do their grocery shopping.' Aldi Australia group director Simon Padovani-Ginies told Yahoo Finance the supermarket was 'over the moon' to be the only supermarket to get five stars across multiple categories, including value for money. 'This really shows our Price Promise in action - we won't be beaten on the cost of your weekly shop,' he said. 'Customers know they can rely on us to deliver the best prices without ever compromising on quality.'Padovani-Ginies said 'fine-tuning even the smallest details' of its operations allowed it to save money and pass these on to customers. Coles, Woolworths and IGA received four stars for overall satisfaction in the survey. For value for money, Coles and Woolworths got four stars and IGA got three. The two categories where IGA scored lower were checkout experience and product range, at four stars. Aldi has also consistently come out on top in CHOICE's quarterly supermarket price surveys, beating out Woolworths, Coles and IGA for the price of a basket of groceries. Shoppers search for savings as prices skyrocket Canstar Blue research found the average spend on weekly groceries for a household of four had increased 11 per cent in the last year to $240. 'That's the biggest annual jump recorded in the last five years, and likely no surprise to anyone who's been at the checkout lately,' Radford said. 'To combat higher costs at the register, shoppers are paying more attention to their spending. More than 80 per cent have changed how they shop, whether by looking at unit prices, buying marked-down products, choosing in-season fruit and vegetables, or swapping to frozen instead.' Sydney woman Bronte Lang previously told Yahoo Finance she had made the switch to Aldi after finding she and her partner were consistently paying $250 a week for groceries at Woolworths. 'I do find it is cheaper,' she said. 'I do feel like you can get a lot more meat for your money, I would say that's the biggest thing, is meat is a lot cheaper. 'And just smart swaps. I really don't need the brand name of something when you can get the same thing at Aldi, particularly your home products like cleaning products, toilet paper, all that kind of stuff, you get it cheaper and it's the same product.' Lang said the couple were now spending about $180 per week on average on groceries since switching to Aldi and shopping smarter. Radford said Aussies wanted supermarkets to offer low prices across all products in store, not just on the specials, and they were becoming increasingly price-savvy. She said there were simple ways to save. 'Whether shoppers are keen to change how they shop entirely, or maybe just mix up a couple of usual grocery habits, taking just a couple of extra minutes to compare prices and, where possible, opting for a supermarket-owned brand instead of a named brand, is a great place to start if they're serious about saving,' she said.
