Community pharmacies will not survive if Coles and Woolworths enter the space
There are moves afoot in NSW to give Lotto and lotteries to Coles and Woolworths (the duopoly). There is also the continuing push to get pharmacy into the duopoly, a push that is supported by ideologically driven economists.
The attempt to get Lotto into the duopoly has been thwarted for the time being but the attempt will be made again. If the duopoly get lotteries and pharmacies then the nature of our communities would change forever – for the worse.
This not an just issue about competition between big business and small; it is an issue about our society; about what our communities look like; about where we work; about our right to choice; and about support for the small retail and hospitality sector.
Independent retailers and the community
A newsagency sells many things: local and international newspapers, magazines, lotto and lottery tickets, scratchies, books, pens and pencils, calling cards, general stationery and the like. They thrive on the service they offer and the range of goods but they must get the customer through the door in the first place and that is where Lotto is so important.
Community pharmacies provide prescription medicine, other medicine, health products, advice, cosmetics, toiletries and more. They will not survive just on income from prescriptions and they must provide high quality services, well-trained employees and have a close connection to their community.
Coles and Woolworths do not solely thrive on customer service or attracting people with particular products, they also thrive on forcing the competitors out of the market place or by jumping into partnership with big developers and being part of very large shopping malls that in the end become local retail monopolies. If they do get what they want then newsagents and pharmacies would disappear from the high streets of urban communities and from the main streets of regional centres throughout Australia and from the shopping malls themselves.
Currently, by the nature of urban planning and community behaviour, we will find small interesting businesses clustered together. Nearby to the newsagents and the pharmacy will be other retailers such as gift shops, specialists shoe stores, clothing stores, book shops and the like. There will also be cafes, restaurants, bakeries and quirky wine bars and coffee shops. They cluster together to provide services to those who will visit the newsagents and the pharmacy. They add to the vibrancy of communities and they make communities different from each other.
Just look at Sydney’s suburbs: Compare Newtown to Miranda, there is a difference; compare Miranda to Edgecliff – no real difference as those two communities are built around mega-malls. Compare Newtown to Balmain or any other community where the high street has survived and there is still a difference. People will travel to enjoy that difference. Similar situations exist in all major cities and towns. Let’s make sure the difference remains.
That difference will be lost if Lotto goes into the biggest retailers. That difference will never return if pharmacy also goes into the biggest retailers. Predictable and boring will be the culture of our communities and our shopping experiences.
What the duopoly and retail union stand to gain
There is more to this story. Coles and Woolworths also get a leg up when it comes to industrial relations. The duopoly only pay time and half to staff on a Sunday while a newsagent and a pharmacist must pay staff double time on a Sunday. That is a nice, cosy position the duopoly has negotiated in partnership with the biggest union in Australia, the SDA (the Shop, Distributive and Allied Employees Association – the retail union whose members are nearly all from the duopoly). The SDA gets more members and grows bigger as the duopoly grows bigger. One way of growing is to increase market share by forcing other businesses to close on Sundays by making their wages too high while at the same time minimising the wages in the duopoly.
There is even more still to the story. If Lotto and pharmacy eventually move into the duopoly there will be a fall in employment. The duopoly would hardly increase employee numbers as they could just absorb the new tasks into the role of their checkout operators while the employees and the owners of newsagents, pharmacies and other shops and cafes would find themselves out of work.
Finally, when it comes to gambling and health products, it has been shown that newsagents and pharmacists are better able to handle community obligations and customer needs. Big retail businesses have no great history of showing care for customers who need extra support or special service. Community pharmacists and newsagents are people who live in their own communities and feel the responsibility of being a local employer and supplier.
The duopoly are owned by people very remote from community. Someone with a special health need or a gambling issue will need special support and advice, not a checkout. It is beyond imagination that Coles or Woolworths would have methadone facilities in their supermarkets as that may attract unwanted people fighting drug addiction who probably have no spare cash. Community provides what everyone needs, not just services to those with money and without difficult problems.
We must draw a line in the sand for the sake of our communities. We must protect our local retail culture and our community from domination by a few. Governments must resist the opinions of ideologues, and they cannot drop their guard at any time or the community will suffer.
Peter Strong is the chief executive of the Council of Small Business of Australia. He is also a member of SmartCompany’s advisory board.