Digging into GroceryCHOICE

Earlier this week, South Australian senator Nick Xenophon raised concerns that the Government’s FuelWatch scheme would lead to higher petrol prices and that small independent petrol retailers were likely to be disadvantaged by the scheme. So it looks likely that the FuelWatch legislation will fail to pass the senate and then fade into oblivion. I can’t say I’m too upset about this as I have been critical of the scheme. Furthermore, falling oil prices have led to a fall of around 20 cents/litre in petrol prices which takes much of the sting out of the issue.

So now I am free to turn my attention to another Australian Government initiative, GroceryCHOICE. This scheme aims to “[help] consumers find the cheapest supermarket chain in their area without having to compare hundreds of prices”. Every month a survey is conducted of prices on around 500 different grocery items at over 600 supermarkets around the region. These prices are aggregated into “baskets” of goods in the following categories:

• Meat & Seafood
• Fruit & Vegetables
• Dairy
• Breads & Cereals
• Drinks & Other Snacks
• General Groceries
• Household & Personal Care

There is also a “Basic Staples” basket, which includes some items from each of the more specific baskets. Prices of these baskets are averaged across 61 regions around the country and reported on the site for each of the major retail chains.

Italy has introduced a similar scheme, which allows consumers to receive text messages giving them prices around the country for specific items. Unfortunately, the Australian scheme only provides prices for baskets not individual products (supposedly “to prevent the manipulation of the price survey”, but this doesn’t seem to worry the Italian Government), so for an Inner West shopper like myself, if I am interested in tomatoes, this is what I can learn from GroceryCHOICE:

Retailer	Fruit & Vegetable Basket
Coles/BI-LO	$25.05
Woolworths/Safeway	$24.63
Franklins	$25.70
Independents	$27.34

So, while I can save 42 cents by shopping at Woolworths rather than Coles, that’s only if I buy an unspecified selection of fruit and vegetables (possibly including Brussel Sprouts, which I would be prepared to pay not to eat). So, GroceryCHOICE would not seem to be very useful for me. Not only that, while the Italian service explicitly compares prices around the country, the GroceryCHOICE site makes it rather tricky to make regional comparisons.

I took this as a challenge, so I wrote a little script* to extract all the data from the chart and published the results on Swivel. There are separate datasets for the product category baskets and the Basic Staples basket. The data can be easily downloaded, so feel free to explore further!

The results are not too surprising: ALDI is consistently cheaper than all of the other retailers and the independents are the most expensive, as is evident in the chart below.

Average “Basic Staples” Prices

However, first glances can be misleading. For each retailer, these averages are taken across those regions for which prices are available. Since Franklins price data is missing in many of the most expensive regions (such as the Northern Territory), this is an unfair comparison. For example, restricting prices to just the regions where Franklins prices are available brings the Woolworths average price down from $77.57 to $76.26, making it cheaper than Franklins.

Looking at the product category baskets gives us a bit more detail (although ALDI prices are not available for these baskets). The following charts provide a graphical comparison of Woolworths basket prices compared to all of the other retail groups. Blue points represent baskets that are cheaper at Woolworths and red represents baskets that are more expensive at Woolworths.

Grocery Prices: Woolworths versus The Rest

Overall, this comparison makes Woolworths look quite good, but if you are wondering about that outlier where Coles is much cheaper than Woolworths, it is the Fruit and Vegetable basket in North NT. It costs $29.03 at Coles but it will set you back $32.54 at Woolworths, which is an impressive $3.62 mark-up.

To get a sense of the range of prices around Australia, this chart gives the full picture for the Basic Staples basket. It is sorted by the price at Woolworths and I could not help noticing that the cheapest area to shop at Woolworths is Outer Sydney North West. Isn’t that right near head office?

* The script used to scrape the data is available here (choice.pl). Coding tips are welcome!

NAB takes $830 million hit

nab, the largest of Australia’s banks saw its share price fall by almost 14% today after they announced an A$830 million (US$795 million) provision on mortgage-backed CDOs (“collateralised debt obligations”).

It has been estimated that the US sub-prime mortgage crisis has resulted in over US$450 billion in write-downs to date and, earlier this year, the IMF suggested that the figure could rise to almost US$1 trillion. Up until now, Australian bank balance sheets had appeared fairly clean compared to their global peers, and they had avoided the large write-downs that have become common-place elsewhere over the last year. So what happened at nab?

Kwoff

This evening I caught up for a chat and a couple of beers with Dan Walsh, the technologist behind the scenes of the Australian social news site Kwoff.

For those not familiar with social news sites, the idea is that users submit links to interesting news articles (or blog posts, funny photos, videos or anything else that tickles their fancy) and then other users can vote for the stories they enjoyed reading. The most popular stories then float to the top where they are easily found by visitors to the site. This is a classic example of the Web 2.0 technique of crowd-sourcing.

Update on Sydney Petrol Prices

A little while ago I wrote about the relationship between crude oil prices and the price Sydney motorists are paying for petrol at the pump. The Australian Automobile Association (AAA) has now released their price data for June and, not surprisingly, prices continued to track moves implied by rising crude oil prices. The simple regression model suggested that average prices would be up 8 cents/litre. The AAA data shows a rise of 10 cents/litre in the average Sydney price.

The Garnaut Report and “Tit-for-Tat”

For those outside Australia, the Garnaut Climate Change Review is our equivalent of the Stern Review and last week a draft report was released. In this report, a nation’s decision as to how to act in the face of climate change is compared to the prisoner’s dilemma:

Effective international action is necessary if the risks of dangerous climate change are to be held to acceptable levels, but deeply problematic. International cooperation is essential for a solution to a global problem. However, such a solution requires the resolution of a genuine prisoners’ dilemma. Each country benefits from a national point of view if it does less of the mitigation itself, and others do more. If all countries act on this basis, without forethought and cooperation, there will be no resolution of the dilemma.

The Gradual Demise of the Compact Disc

The Australian Recording Industry Association (ARIA), after taking a look at sales for the first half of 2008, has run crying poor to the Herald Sun. While they have not yet released these figures to the public, they presumably continue the trend evident in published figures for 2006 and 2007.

Australian Music Sales

The Price of Carbon for Petrol

Commenting on my petrol prices post, Mark Lauer suggested that excise on petrol should in fact be increased to deal with negative externalities:

Personally I think we should be increasing the excise. It represents the many negative externalities that car use in our society creates: carbon emissions, use of space for (larger) roads; materials, construction and maintenance of (larger) roads; particulate pollution; deaths and injuries from road accidents, and so on, all of which scale with mileage and hence fuel use. And our understanding of all these factors is moving in the direction of increased disutility. Hence the charges should be increased.

I’ve been thinking about petrol and carbon emissions a bit over the last few weeks, so this is as good a prompt as any to put down my thoughts here on the Mule. I should also point out that I have Mark to thank for the back of the envelope calculation that I’ll discuss here.

Sydney Petrol Prices

Soaring petrol prices have led to all sorts of calls for action to help reduce prices. The Opposition called for a 5 cents per litre reduction in the excise on petrol, which currently stands at 38.1 cents per litre. (See note below for an explanation of the strike-throughs). the abolition of the double taxation of petrol by eliminating Goods and Services Tax (GST) on petrol excise. Since the excise is currently 38.1 cents per litre, this would save 3.8 cents per litre. One Victorian Liberal MP, Chris Pearce, went further and called for a 10 cent reduction in petrol excise. The Rudd Government initially claimed that there was nothing more that they could do, but then buckled to the pressure and has proposed the introduction of a national FuelWatch scheme aimed at promoting price transparency at the bowser. The Minister for Competition Policy & Consumer Affairs, Chris Bowen, has indicated that this scheme is expected to save around 2 cents per litre. So, what is going on with petrol prices and what are the merits of these proposals?

CityRail’s 14 Day RailPass

On my way into the station this morning, I was handed a brochure about CityRail’s new 14 Day RailPass. A bargain at exactly twice the price of a weekly pass, I suspect that it is, in fact, a cunning plan to prise more fare evasion fines from me. Thanks to public holidays, interstate trips and the like, my weekly ticket buying cycle tends to wander through the week and, since there are no ticket barriers at Newtown station, it’s all too easy for me to breeze straight down onto the platform only to be trapped at Wynyard without a valid ticket. The station attendants will always let me through to buy a ticket, but the railway police (if that’s what they are called) are another matter. Take it from me, no amount of waving expired weekly tickets will get you out of the $200 fine. Even writing pitiful letters doesn’t help. Now I’m sure that CityRail is wise to my forgetfulness and realise that if I can forget that I’m supposed to buy a new ticket on Tuesday morning, how much more likely will I be to forget to buy one every second Tuesday?

OpenAustralia

Last Monday the public beta of OpenAustralia.org was launched. The site, closely modelled on the UK’s TheyWorkForYou.com, aims to make the workings of Australia’s democracy more transparent.

Transcripts of parliamentary proceedings (Hansard) have been available on line for some time, but OpenAustralia takes the same content and gives it a Web 2.0 work-over. Searching is far easier than on the parliamentary website. You can enter your postcode, find your local member and then search for particular words or phrases in her speech (in my case Tanya Plibersek) and you can even subscribe to an email alert which lets you know whenever she says something in parliament. You are also able to post comments on individual speeches. This feature provides a intriguing forum for community debate of political issues without the filter of media decisions as to what is or is not newsworthy. I will be very interested to see how these discussions evolve.