The claim that West Australian shoppers pay less for food and groceries than those in other states where trading hours are not restricted is not correct.
The latest survey of average retail prices by the Australian Bureau of Statistics shows Perth is the most expensive capital overall for food and groceries in Australia except for Darwin, which costs marginally more because of its small size and remoteness.
An owner of multiple private supermarkets in Perth claimed on local radio today that deregulation of shopping hours in WA would mean less competition and push up prices. This turns on the assumption that IGA stores would lose their near monopoly over evening and Sunday trading because Coles and Woolworths would be allowed to open.
The supermarket owner claimed this would lead to less competition - implying shoppers would abandon private supermarkets, which would then go out of business - and prices in Coles and Woolworths "would go up to the prices that they're charging in Sydney". This is a nonsensical and illusory proposition and has not been the experience in other capitals following the freeing up of trading hours.
Today, prices in Sydney are cheaper than Perth in fact, as they are in Brisbane, Sydney, Canberra, Melbourne, Adelaide and Hobart. The Bureau of Statistics findings for December show a representative basket of items ranging from meat and fish to processed food and household supplies cost $240.50 in Sydney - a clear $10 less than in Perth which was $250.60. Sydney was second cheapest in the nation, beaten only by Brisbane.
Except for one month (June 2005) when Hobart was 74 cents higher, the basket has cost more in Perth than any of the other states in every quarterly survey since the ABS began monitoring prices in December 2004.
Trends in retail prices over time show that overall prices growth has been considerably lower in other states where deregulation has been introduced. By contrast Perth retail prices growth has been higher.
The data does not support the notion advanced by protected private supermarkets in WA that competition is lessened by opening up shopping hours to all retailers. To argue that allowing more competition in the marketplace leads to less competition is illogical and has no proven economic basis.
In any event, there are more than 20,000 retailers in Western Australia and all are affected by restrictive trading hours laws. This issue is not just about groceries and the competition for business between the major supermarket chains of Coles, Woolworths and IGA.
Statement by CCI Chief Economist, John Nicolaou