When the new players arrive here its my money and if I can buy the same product much cheaper with the new entrants that's where I will be going. We were gobsmacked at how much more you get for for $$$ in some of the overseas supermarkets in comparison to Oz. I cant understand how we could buy the same amount of produce that was usually fresher and of better quality than here for half the money in the USA from big supermarket chains like Ralphs.
Woolworths and Coles have bought the competition to our shores because their margins are too good to ignore. Do you think Costco, Aldi and the new entrant Kaufland would even bother coming to Australia with our relatively small population, the ROE in Aus is too good to ignore. The duopoly squeezed out the smaller players and captured 80% of the market and got too cocky with their pricing, margins and conditions. Our local IGA and Woolies supermarket in Mt Eliza is trying to run a campaign to stop the rezoning to allow Kaufman to open nearby because they know they wont be able to compete. Just like you say @gsad1000, they are not a charity, I am not their charity either and if I can buy the same product for much less then they wont be seeing my loyalty. Its a tough dog eat dog world and I welcome the new competition. Just like they used their size and might to capture market share the bigger players are coming to give them a taste of what they dished out.
A bonus of new entrants in the supermarket space for A2M is that they will offer popular FMCG like our A2 IF more attractive terms to take on their product. Their arrival here will force the existing players to relinquish some margin to suppliers of popular products thus increasing A2m profits in the process. Win, win for companies like us, increased supply and new entrants willing to take on our product will mean competition between the existing and newer players will play in our favour in a fight to get our product on their shelves.
A2M Price at posting:
$11.79 Sentiment: Buy Disclosure: Held
(20min delay)