Should governments regulate supermarkets or run them

The Green Institute has proposed establishing a publicly owned supermarket chain to challenge the dominance of Coles and Woolworths. An RMIT expert says increasing competition would be a more effective way to reduce grocery prices than having governments enter the retail market.

Dr Balaji Makam, School of Economics Finance & Marketing:

"A publicly owned supermarket may sound like an attractive response to cost-of-living pressures, but grocery shopping is about much more than price.

"Consumers choose supermarkets based on convenience, product range, freshness and trust, alongside affordability. Those relationships have been built by major retailers over decades and would be difficult to replicate quickly.

"The bigger question is whether taxpayers would get better value from the government running supermarkets or from policies that increase competition across the sector.

"If the goal is lower prices, governments could strengthen competition laws, improve supply chain efficiency, support independent grocers and increase pricing transparency.

"The cost-of-living challenge is real, but the most effective solution is likely to be creating a more competitive grocery market, rather than turning the government into a supermarket operator."

Read more here.

Dr Balaji Makam is an Associate Professor and RMIT's head of the marketing department. His research focusses on services marketing, sustainability marketing, consumer behaviour, and AI/Technology in marketing.

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