In Victoria Point, south-east of Brisbane, Skippy's Fresh Frootz, a green grocer, has initiated a price challenge against Woolworths and Coles by offering Hass avocados and large continental cucumbers at the cost price of 5 cents each. This pricing strategy has attracted attention Australia-wide, contrasting significantly with the current prices at Coles—$1.50 for avocados and $3 for cucumbers—and at Woolworths, where avocados are $1.20 and cucumbers are $2.50.
According to Elijah from Skippy's Fresh Frootz, these items are sold at the acquisition cost, highlighting the substantial mark-ups applied by the major supermarkets, which are 2300 percent and 4900 percent at Woolworths and 2900 percent and 5900 percent at Coles for avocados and cucumbers respectively.
He argues that while selling at 5 cents may be unrealistic for Woolworths and Coles, their mark-ups are excessively high. Skippy's approach demonstrates a model where profit is not made on every item but balanced across various products, suggesting that larger chains could adopt a similar strategy for in-season produce to offer more competitive pricing. Elijah points out that the major retailers, due to their buying power, obtain these products at even lower costs, making their high retail prices and mark-ups appear unjustifiable.
Source: 7news.com.au
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