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AAP in Australia reports that FoodWorks, an independent supermarket group there, plans to compete in the chain-dominated marketplace (Woolworths and soon-to-be-sold Coles own as much as 80 percent of the market) simply by stressing local, personal stores.

"Coles and the Woolies seem to be driving for overall operation efficiency in wanting to get bigger and bigger, and what we're finding is that it is opening up the neighbourhood centre-type opportunities,” says FoodWorks national business development manager Simon Thompson. “We're finding that the big guys are not really interested in those medium-sized businesses, that can sit within a community.”

And, Thompson says, “We don't have any issue whatsoever competing on price and at least equaling if not beating them on price. Obviously, we are a smaller-volume business than Coles or Woolworths so our scales and efficiencies can't be as good as theirs.

"But they don't seem to be that interested in driving down price. They are not passing it onto their consumers."
KC's View:
The question, it seems to us, is whether the FoodWorks stores can be effective as well as efficient.