Independent supermarket in receivership as price war continues to pressure suppliers

An independent supermarket in New South Wales has been placed in receivership, as pressure continues to rise against suppliers as Coles and Woolworths beef up their discounting campaigns. In the past week the supermarket giants have said they will continue to discount on major items, much to the disdain of lobby groups including the Australian […]

Patrick Stafford 06 February, 2012

An independent supermarket in New South Wales has been placed in receivership, as pressure continues to rise against suppliers as Coles and Woolworths beef up their discounting campaigns.

In the past week the supermarket giants have said they will continue to discount on major items, much to the disdain of lobby groups including the Australian Food and Grocery Council.

However, the link between the two may not be so clear. Rocky Lamattina, senior vice president of the Vegetable Growers of Australia, Victoria division, says there is pressure on suppliers and smaller stores but it may be awhile before the rest of the industry starts seeing an impact.

“It’s too early to tell at the moment,” he told SmartCompany this morning.

“At the moment, what we’re seeing is there is enough stock to supply the demand, but when we get further down to stock levels and other suppliers that aren’t directly involved – that hasn’t happened yet.”

“It still needs to filter down to those companies that aren’t supplying directly.”

As a result, he says, it’s too early to tell whether pressure on independent supermarkets and other stores can be related to the Coles versus Woolworths price wars.

“It’ll be awhile. I think in about three to six months if there’s any impact we’ll start to see it.”

Duffy Bros Country Fresh at Darlinghurst has been placed in receivership, it was confirmed last week. The supermarket sells a range of fresh groceries including fruit, vegetables and meat, and is located in the inner-city.

The company has many locations, but the receivership only affects the Darlinghurst location.

An advertisement for the sale of the business was launched last week, noting the company is turning over $140,000 per week.

Neil Cussen & Vaughan Strawbridge of Deloitte were appointed as receivers, and confirmed to SmartCompany the business was in the process of looking for a buyer.

“The business is in receivership,” a spokesperson said. “The site itself is a supermarket in the inner city, and the business is pursuing a number of options, which is the reason for the advertisement published.”