Instead of buiding Colesworth-style supermarkets and competing with their duopoly, they could focus on warehousing shelf-stable, non-perishable essential items:
- UHT Milk (dairy and otherwise)
- Bulk bags of pasta, dry grains and legumes
- Flour, sugar, cocoa and similar basic baking supplies
- Cordial/Juice/etc
- Cookies/Biscuits/Crackers
- Nuts and seeds
- Canned/Jarred/Dried veg and fruit
- Toilet paper, soap etc
That way they don’t have to worry about refrigeration or freezing in their supply chain and can just store things. They can set up shop anywhere not having to build a massive building with cold rooms and elaborate air conditioning like regular supermarkets. They could even send things out through regular post or delivery, not having to use refrigerated trucks and time-dependent systems like Colesworth do.
Legitimate question; all three of the biggest supermarkets in Australia (Coles, Woolies & Aldi) are publicly traded companies - anyone can see their quarterly/annual P&Ls.
All three post net profits of less than ~3%; so out of every $100 they earn, 97% goes towards paying suppliers, staff, utilities and covering other operating costs.
Having the Government run ~200 stores isn’t going to drastically cut prices to make things more affordable, not without underpaying staff or suppliers?
My understanding was that Mamdani’s plan to open City-run supermarkets was to help address food deserts, where the only other options end up being the equivalent of convenience stores? That’s not nearly as big of a problem here in Australia.
97% goes towards paying suppliers, staff, utilities and covering other operating costs.
I’m looking at the Woolworths 2026 Annual report and I do not know how you got those numbers. These reports are beautifully formatted cryptic messes designed to hide stuff, not to properly inform debate on government ownership or how the books would change under government operation.
Their raw revenue was 72 billion, then they claim most of that is spent on these vague categories:
- Cost of sales
- Branch expenses
- Administration expenses
- Other expenses
Some of these things contain some components of suppliers, staff and utilities. But there is a lot going other places.
“Profit” is a very dangerous term because it’s intentionally gamed in the reporting by all companies to reduce tax liability. Woolworths claims they are only left with 1 billion in profit after they do their sums, but, under government control you’d realise that this number is really misleading. Eg checkout these things in their report:
- 3 billion of asset depreciation
- ~1 billion of shareholder dividends (remember that’s not “profit”!)
- ~1 billion for underpaid staff rumeneration (it’s cheaper to pay them right in the first place and not have to do court costs, dear god)
- (probably a lot more interesting stuff I’ve missed, on a train RN)
I’m going to say their headline tiny profitability is not what you think it is, and that they’re not poor Woolies struggling with borderline profitability because of big employee and big supplier. For more fun on creative book keeping: checkout airlines. Some of them intentionally teeter themselves to reported non-profitability when it suits them.
Having the Government run ~200 stores isn’t going to drastically cut prices to make things more affordable, not without underpaying staff or suppliers?
As a government-run business, they have no need to pursue profit; they provide a service to people. The point of state-run grocery stores is to spend government money providing for people’s needs, there is no justification to underpay workers nor suppliers, nor to overcharge for the groceries.
Pay the suppliers a fair rate for their goods; this might be above what the duopolists pay, and that’s no problem. Charge a retail price low enough that people can afford groceries. Pay the workers enough to decently remunerate their work; this might be above what other grocery workers are paid, and that’s no problem.
The Australian government can always pay whatever Australian dollars are needed for this. By legislating they will pay the money they thereby create the money to pay for it. We should demand they pay for whatever is needed to provide what we need, without any condition on the business to return any profit.
Perhaps that results in a business that returns no profit. Perhaps as a business even ends up spending more money than it brings in. This is fine, so long as it does what we need it to do for that money spent.
(For those concerned with the risk of inflation by spending government money: that’s a valid concern! But paying decent prices to farmers for food, paying decent wages to workers in the grocery stores, is not what drives inflation. Let’s reduce inflation by taxing away the super-wealth of billionaires.)
All of these valid goals are compatible simultaneously, because there is no need for the state-run grocery business to be profitable. Government is meant to provide for its people, it is irrelevant whether the business returns a profit.
