Case Study: Coles Supermarket Australia Pty Ltd.

Coles Supermarket Australia Pty Ltd is an Australian supermarket, owned by Wesfarmers. It is commonly known as Coles and was founded on 9th April 1914 in Smith St, Collingwood, Victoria. Till now, Coles has operated over 700 stores throughout Australia and employs over 100,000 employees. It controls 35% of Australian supermarket industry.

Coles was founded when George James Coles opened the Coles Variety Store on the street in Melbourne. Further expansion and Coles’ interest in food retailing were occurred in year 1958, at the same time; it acquired 54 John Connell Dickins grocery stores. After that, it acquired the Beilby’s chain in South Australia in 1959 and 265 Matthews Thompson grocery stores in New South Wales in 1960. In 1973,

Bargaining Power of Buyers

The level of bargaining power of buyers is moderate because one of the reason is Coles does not have much competitors to compete with.Their Consumers can switch brand easily because they are very sensitive to price and will compare and choose the cheapest alternative. However, the Federal Government and ACCC has set a restriction to lower down the competition barriers to allow new competitors to enter the market which will widen consumers choice and lead to increase of bargaining power of buyer level to high.

Threat of Substitutes

The level of threat of substitutes is high, this means that Coles has a lot of indirect competitors such as farmers’ markets, specialist grocery stores and convenience stores. These indirect competitors posed a serious threat to Coles. If a farmers’ markets were to expand in offering more variety of products, they would be able to compete directly with supermarkets. Coles would lose out because of price variances of

This is because Coles is one of the largest and leading food retailers in Australia, which makes new entrant of the food retail industry hard to ncompete with a supermarket like Coles. Also, the threatening combination of domestic zoning regulations and leasing conditions with landlords has caused an induced deprivation of grocery shopping sites. This has prevented numerous businesses from expanding into the market, especially international organizations whom are interested in entering the Australian grocery industry. If there were possibilities that new organizations are able to enter the Australian grocery market, they would have to compete with Coles. The organizations must be able to pull off economics of scale, massive investment in infrastructure and facilities and with the skills to