The derelict Giralang shops. Photo: Melissa Adams
Supermarkets keep appearing in the ACT news, due to either the redevelopment of supermarket sites, the loss of Australian products or the decline in competition. Change is inevitable, and some change is good and some is bad. So what is happening on the local scene at present?
First, in recent decades, the hierarchy of shopping centres in Canberra has been undermined by changing shopping patterns, with residents abandoning the local supermarket. In Belconnen, local shops no longer exist, in any real operative sense, in Aranda, Latham and Macgregor. Another five suburbs - McKellar, Macquarie, Weetangera, Higgins and Page - have lost their supermarket. Apart from McKellar, all these supermarkets were within about one kilometre of a group or town centre.
Second, the laissez-faire economic solution to competition issues was to allow in overseas supermarket companies. Aldi from Germany and Costco from the United States have both spread across Australia in recent years, replacing former chains such as Flemings (bought by Woolworths). It is questionable whether even our high rate of population growth is enough to accommodate more large supermarket chains. It seems the only way companies can continue to produce the annual growth required by investors is either to increase market share through acquiring existing independent stores or to lower costs by reducing product choice, replacing Australian-made goods with cheap imports and reducing in-store service.
Woolworths is increasing its number of stores. In Belconnen, it has added to its town centre store by taking over three formerly independent supermarkets - in the group centres of Kippax, Charnwood and Hawker. It has also established a boutique store at Dunlop and is planning another, larger store in the proposed redevelopment of the Giralang local centre.
The saga of the Giralang shops has remarkable similarities to the Latham shops debacle of a decade earlier. Both shopping centres had a single owner. Both owners decided to close down the shops and replace them with residential units. In both cases, local residents objected.
The Latham owner was successful in redeveloping the centre as residential units but was required to retain one small, 175-square-metre convenience store. This experience resulted in the ACT government strengthening its support for local shopping centres and, as a consequence, the Giralang owner has been required to retain shops in its redevelopment.
In this respect, Giralang has reversed the Latham situation by getting approval for a 1500-square-metre supermarket, which greatly exceeds the usual 300-to-800 square metres for local supermarkets. There will also be other smaller shops, leading to the possibility of a group centre-sized operation.
The Giralang redevelopment has so far benefited from another aspect arising from the Latham case. At the time, the government saw fit to amend the Planning and Development Act by inserting a phrase to the effect that only those people who would ''suffer material detriment'' from a development were entitled to appeal against the development application.
Chris Watson, of Latham, was the first applicant to test this new provision in the ACT Civil and Administrative Tribunal. His case showed how difficult it is for any person to prove a development would cause him or her to suffer material detriment, and the Watson decision is now the standard case law. This has been used to deny legal standing to appellants against the Giralang development in the ACT Supreme Court and the ACT Court of Appeal.
Commercial appellants were ruled out on the basis that commercial competition alone did not give them the right to challenge the decision as they have the ability to respond commercially to emerging competition. Consequently, the issues of concern that prompted their appeal have not been examined in a public forum.
These appellants face the same difficulty the Australian Competition and Consumer Commission faced in questioning the wisdom of allowing Woolworths to take over Hawker's Supa IGA. Current laissez-faire economics strictly limits the imposition of restrictions on competition. The definition of competition in the Competition and Consumer Act is so narrow as to preclude sensible analysis of the social effects of a takeover, including creeping acquisitions by any one provider in a region, such as Woolworths has been doing in Belconnen.
That the occupant of the new Giralang enlarged supermarket will be Woolworths is another example of creeping acquisition. In this case, Giralang is barely one kilometre from the Kaleen group centre, which has the sole remaining large, independent supermarket in Belconnen (1850 square metres) and a BWS liquor store (owned by Woolworths). It would be unsurprising if one or more of the surrounding local communities were to lose their local supermarket as a consequence of this redevelopment.
As one of two supermarket chains that monopolise over 87 per cent of large supermarkets (more than 2000 square metres) in Australia, Woolworths has the power to reduce prices paid to its suppliers and thus to charge lower prices in its stores, large or small. This gives it an uncompetitive advantage over much smaller independents, which are dwindling in number, thus reducing product and service choice for the community. This outcome is a distortion of natural competition processes.
Robyn Coghlan is chairwoman of the Belconnen Community Council and secretary of the Friends of Hawker Village.