Supermarket monsters beautiful investments?

It took me almost 25 years to get to Tasmania. The lure of Mona and the Derwent River, so elegantly displayed on television each time Test cricket reached Hobart, eventually proved irresistible.

From the airport we picked up a hire car and drove out to the city's southwest, stopping at the quiet town of Lauderdale (pop: 2,500) to gather supplies. Pulling in to the local supermarket car park, the view across the isthmus and out to the bays that form the entrance to the river allayed the thought of – aaarrgh - grocery shopping.

And yet Hill Street Grocer was a revelation, a glimpse of what the perfunctory task of pushing a trolley filled with bland produce primed to disappoint through crowded aisles, might be without the crushing domination of Woolworths and Coles.

I left Hill Street's Lauderdale outlet with green olives, porchetta, smoked almonds, dried fruits, bread from Pigeon Whole Bakery, Greek sweets and enough local cheese to warrant a larger vehicle.

Expecting to be in the store a few minutes, I stayed half an hour, enjoying the sights and smells and the conviviality of shoppers calling in on their way home from work. The scene was almost Mediterranean European, a place where food is venerated for the pleasures it provides, rather than a Calvinistic fuel to be quickly consumed before one returns to the To Do list.

Unfortunately, with Woolworths training its sights on the tiny town of Lauderdale, this particular IGA – yes, hard to believe but true - may not be long for the world.

Malcolm Knox in the August edition of The Monthly, in a story titled Supermarket Monsters – Coles, Woolworths and the price we pay for their domination, covers the details and far, far more.

The big two supermarkets have between them 15 stores in the region, serving, as one is served a school dinner or a writ, about 100,000 people.

The Nikitaras brothers, owners of Hill Street Grocer, thought they might escape the giants' tentacles in Lauderdale, a flood plain where no land was zoned for large commercial use.

You can probably guess the rest. After five years of lobbying, Woolworths aims to open a 3,500 square metre store just up the road from the Hill Street outlet. Knox quotes Marco Nikitaras:

'If they open, we'll have to close. They will be unprofitable. They have no chance of profit for eight to ten years, but it's worth it to them to blow us up. At the moment we're quietly hopeful that they'll forget about it. But one day we'll arrive and there will be a huge excavator.'

Such is the life of a small-scale grocer competing against one of the most dominant and powerful businesses in Australia.

It's rare for anyone in Australian journalism to bend the ear of their editor to the point where they can write 9,000 words on anything, let alone a business-orientated issue such as this. Knox's piece surveys the battlefields on which Australian supermarkets and their suppliers engage, the price that we as a society pay for their crushing dominance and the benefits we reap.

For farmers, food manufacturers and competitors the story makes for terrifying reading. Despite numerous inquiries and court cases, the domination of the big two supermarkets, engaged in a war that burns everyone it touches, their power is only increasing.

Of course, there is another interpretation. Whilst you may not like their methods, their food, their chaotic car parks and wonky trolleys, Knox's piece is utterly convincing in displaying the strength and power of the big supermarkets and their ruthless wielding of it.

No doubt it wasn't Knox's intention but his piece can be read another way - as a 9,000-word Buy recommendation. Either way, this is top-drawer business journalism worth the price of entry, which in this case happens to be free. Here's the link:

http://www.themonthly.com.au/issue/2014/august/1406815200/malcolm-knox/supermarket-monsters