Supermarkets

Supporters of capitalism like to claim that the supermarket is a wonderful capitalist invention. In fact, the supermarket has been a central figure in pro-capitalist propaganda since the Cold War. For decades, popular culture has linked socialism of any variety with images of grey, joyless stores and empty shelves.

This image is so persistent that we even saw people sharing pictures of supermarket shelves emptied by pandemic panic-buying as if it was a taste of socialism at work. The idea that these photos came from supermarkets operating under in a capitalist economy doesn’t seem to have crossed their minds.

Such propaganda has fostered a common-sense notion that publicly owned supermarkets must inevitably lead to a lack of choice or to food shortages. However, the experience of capitalist supermarkets themselves disproves the idea that bureaucratic planning and centralized control always gives rise to such problems.

Supermarkets don’t spontaneously adapt to the signals of a vibrant free market: they are highly planned economic structures. Decisions are made months or years in advance to secure reliable supply chains, meet seasonal demand, and keep shelves filled.

Moreover, far from being a diverse industry, supermarkets tend toward consolidation. In Australia, just two supermarket chains account for over 65 percent of market share, in a pattern that is repeated all over the world. The business model of supermarkets relies on scale. They could fairly be described as natural monopolies — or in Australia at least, duopolies.

The modern supermarket is the result of large-scale logistics engineering and industrial food production. Neither of these things are inherently capitalist, although the inequality and exploitation that currently define the food system certainly are.

In evidence this morning the judge overseeing the case, Justice Michael O'Bryan, asked Coles to explain what it was telling customers with its prominent marketing campaign, featuring giant red hands pointing down.

"It's really asking a bigger question about what ordinary consumers understand about the Down Down program," Justice O'Bryan said.

In response, legal counsel for Coles John Sheahan KC said: "In terms of what consumers would take from the advertising campaigns and the red hand — not much."

"It's an indication that Coles is trying to keep prices low," he said.

[…]

Mr Sheahan said the ACCC case was too complicated because it relied on an assumption that the average shopper understood the many factors that went into deciding a price while they were browsing the aisles.

"It's too complex to credibly attribute to an ordinary, reasonable consumer walking down the aisle at Coles," he said.

"What they would be concerned [about] when they're walking down the aisle … is whether the claimed discount was, to use of the expression yesterday 'fair dinkum.'"

[…]

"In the end, all prices are temporary. Nothing lasts forever," Mr Sheahan said.

He said both sides accepted that the pricing tickets customers were shown in store were "literally correct".

Mr Sheahan repeated Coles's defence that it also reflected a genuine discount.

If Coles added background information about the price history to the ticket it would be too difficult to understand, he said.

First, by inking this deal, Coles frames itself as future-forward and logistically driven. Groceries and grocery-store labour become more data, just like the hedge funds, healthcare, or immigrants that other Palantir clients coordinate.

Supermarkets have been under fire over the past year for increasing profit margins through a pandemic and cost-of-living crisis, and accused of underpaying workers.

The Palantir deal continues this extractive trajectory. Rather than paying workers more or passing savings onto customers, Coles has chosen to invest millions in technology that will “address workforce-related spend” as part of a larger effort to cut costs by a billion dollars over the next four years. Food (and the labour needed to grow, pack and ship it) is transformed from a human need to an optimisation problem. 

Second, dependence. As my own research found, Palantir clients tend to enjoy the all-encompassing data and new features but also become dependent on them. Data mounts up; new servers are needed; licensing fees are high but must be paid.

Much like Apple or Amazon, Palantir’s services excel at creating “vendor lock-in”, a perfect walled garden which clients find hard to leave. This pattern suggests that, over the next three years, Coles will increasingly depend on Silicon Valley technology to understand and manage its own business. A company that sells a quarter of Australia’s groceries may become operationally reliant on a US tech titan.

As food prices keep climbing and grocery chains rake in record profits amid slim margins, it’s time to seriously consider a public alternative to the supermarket giants and dépanneurs: municipally owned grocery stores.

It’s not as far-fetched as it sounds. In Madison, Wisconsin, a city-owned grocery store is in the works to serve an underserved neighbourhood after the last private grocer pulled out. Atlanta operates two public grocery outlets to tackle food deserts — where full grocers are distant and inaccessible for whole populations, typically due to community poverty and poor profit margins. Chicago is moving ahead with a city-run food market to help poorer residents afford groceries. These U.S. cities do not want to become supermarket empires, rather,  they are responding to a market failure causing hunger and poverty. When concentrated corporate ownership meets declining margins and socioeconomic gaps, some neighbourhoods are left with no fresh food options at all.

In New York City, 2025 Democratic Mayoral Candidate Zohran Mamdani is pushing for a public grocery store in every borough. It is a bold idea and campaign policy promise that has emerged in response to rising food insecurity among New Yorkers. The concept gained traction during Mamdani’s Democratic Mayoral Primary campaign, where food justice became one of several economic rallying cries alongside other affordability measures like rent control and free public transit. 

[…]

So far, our food policy imagination has been largely confined to subsidies, zoning incentives, and casual price monitoring. We also tried the classic Canadian tactic of knocking on international doors and asking very, very nicely for prices to freeze or come down. Canadians can likely tell you whether they have felt the benefits of these current approaches. But what if we went further? What if we treated food access not just as a supply-chain challenge or a matter of affordability, but as infrastructure: as essential to community resilience as transit or libraries?

Fears about losing jobs to automation have become commonplace, but according to United Workers Union (UWU) research and policy officer Lauren Kelly, who researches labour and supermarket automation, rather than manual work being eliminated, it is often augmented by automation technologies. This broadens the concern from one of job loss to more wide-ranging implications for the nature of work itself. That is, she says, “rather than replace human workers with robots, many are being forced to work like robots”.

In addition to the monitoring tactics used upon workers, supermarkets also direct their all-seeing eye towards customers through an array of surveillance measures: cameras track individuals through stores, “smart” exit gates remain closed until payment, overhead image recognition at self-serve checkouts assess whether you’re actually weighing brown onions, and so on. Woolworths even invests in a data-driven “crime intelligence platform”, which raises significant privacy concerns, shares data with police and claims that it can predict crime before it happens – not just the plot of Minority Report but also an offshoot of the deeply problematic concept of “predictive policing”. Modern supermarkets have become a testing ground for an array of potential rights-infringing technologies.

Late last year, the company introduced a new framework to enforce an efficiency rate for picking of 100%. Workers who weren’t meeting the standard would be put into a coaching program. Some were directed to “stop all time wasting and non-productive behaviors”, according to warning letters seen by Guardian Australia. Failure to improve could lead to disciplinary action and even loss of employment. One worker described it as a “bullying” tactic.

[…]

A spokesperson for Primary Connect, Woolworths’ supply chain arm, said its coaching framework helped “to ensure a fair approach to the standards is applied to any personal circumstances or abilities”.

[…]

But Guardian Australia spoke to a dozen current and former workers for Woolworths and Primary Connect, who claim the standards are unfair and putting their safety at risk. All requested anonymity for fear of losing their jobs.

As more people shop online, there’s been growing attention to the treatment and tracking of workers in warehouses run by e-commerce conglomerates like Amazon. In June, the state of California fined the company for failing to properly disclose its productivity targets to workers – a decision the company is reportedly appealing. But Australian warehouse workers have long been subject to this style of control. Engineered standards were introduced by Australian supermarket chains in the late 1980s and 1990s and were the target of industrial action.

“It’s a fantasy of total efficiency,” Christopher O’Neill, a research fellow at Deakin University who studies workplace automation, said of engineered standards. “The argument was: this was a ‘scientific’ way of rationalising work and eliminating wasted time,” he said.

“It’s basically a pseudoscientific veneer over this kind of fantasy of being able to control every second of every day.”

The two new working papers use novel methods to isolate Walmart’s economic impact—and what they find does not look like a progressive success story after all. The first, posted in September by the social scientists Lukas Lehner and Zachary Parolin and the economists Clemente Pignatti and Rafael Pintro Schmitt, draws on a uniquely detailed dataset that tracks a wide range of outcomes for more than 18,000 individuals across the U.S. going back to 1968. These rich data allowed Parolin and his co-authors to create the economics equivalent of a clinical trial for medicine: They matched up two demographically comparable groups of individuals within the dataset and observed what happened when one of those groups was exposed to the “treatment” (the opening of the Walmart) and the other was not.

Their conclusion: In the 10 years after a Walmart Supercenter opened in a given community, the average household in that community experienced a 6 percent decline in yearly income—equivalent to about $5,000 a year in 2024 dollars—compared with households that didn’t have a Walmart open near them. Low-income, young, and less-educated workers suffered the largest losses.

[…]

But their analysis has a potential weakness: It can’t account for the possibility that Walmarts are not evenly distributed. The company might, for whatever reason, choose communities according to some hard-to-detect set of factors, such as deindustrialization or de-unionization, that predispose those places to growing poverty in the first place. That’s where the second working paper, posted last December, comes in. In it, the economist Justin Wiltshire compares the economic trajectory of counties where a Walmart did open with counties where Walmart tried to open but failed because of local resistance. In other words, if Walmart is selecting locations based on certain hidden characteristics, these counties all should have them. Still, Wiltshire arrives at similar results: Workers in counties where a Walmart opened experienced a greater decline in earnings than they made up for with cost savings, leaving them worse off overall. Even more interesting, he finds that the losses weren’t limited to workers in the retail industry; they affected basically every sector from manufacturing to agriculture.

Late last year, the company introduced a new framework to enforce an efficiency rate for picking of 100%. Workers who weren’t meeting the standard would be put into a coaching program. Some were directed to “stop all time wasting and non-productive behaviors”, according to warning letters seen by Guardian Australia. Failure to improve could lead to disciplinary action and even loss of employment. One worker described it as a “bullying” tactic.

Tim, who is over 60, said he was pushed to improve his rating. He got it to more than 80%, then 90%, then 100%, he said, but in his effort to work harder, faster, he was injured.

“You might get someone that’s … 20 years old and goes to the gym every day. And someone like me. I’m getting the average between him and me,” Tim said. “Obviously, I can’t keep up with him.”

“We’re going down the same path as Amazon,” said another worker, Ross*. “We’re not robots, we’re humans.”

A small Victorian milk company says supermarket giant Coles has removed its products from 65 Victorian stores in retribution for refusing to give the supermarket a bigger profit margin.

From next month, Gippsland Jersey milk will only be stocked in about 16 Victorian Coles supermarkets, leaving the business with two weeks to find a new home for thousands of litres of milk.

Sallie Jones, who started the company with dairy farmer Steve Ronalds in 2016, said the decision came as a shock.

"We've gone from being awarded Australia's best milk to then being removed off the majority of Coles shelves, which is super disappointing," she said.

This is from a few years ago, and fits with first-hand experience.

The class action comes as Coles faces legal action from the Fair Work Ombudsman (FWO) over alleged underpayment of its managers. The FWO puts the underpayment at more than $100 million between 2017 and 2020.

In a statement made after filing proceedings in the Federal Court last week, the FWO alleges one worker was underpaid $471,647 during the period.

Beneath those hard numbers are the personal stories of almost 8,000 Coles managers like Ms Macdonald, for whom the allegations represent not only underpayment but years of stress and anxiety while working for the supermarket giant.

[…] Adero Law principal Rory Markham, who is running the class action against Coles, says the company has vastly underestimated the underpayments.

"When you're paid a flat salary, as in the case of Coles managers, there's no allowance for overtime or excessive hours," he says.

He says information from the roughly 2,200 salaried staff who have signed up for the class action show they were working an average of 55 to 65 hours a week — well above their typical contracted roster of 40 hours.