Sam vs Goliath

Photo of Katia and Sam Abouchrouche by Edwin Monk, lifted from The Inner West Independent, August 2010.

It’s a wonder I haven’t blogged about Sam’s shop before now. It’s a family business in Booth Street Annandale that’s been there for almost as long as we’ve been living in this suburb. It’s not our closest shop, but we prefer the extra walk (or, let’s be honest, drive) not only because the shop can be counted on to have good quality vegetables and a huge range of everything, but also for the old-fashioned sense of community and even the occasional free Lebanese lesson. There’s Sam, his wife Kathy and their three sons, though the youngest is too young to work in the shop and the eldest has recently gone to work as a lawyer. The shop, which became an IGA and doubled in size a couple of years ago, is in the news recently as Woolworths are proposing to open a store in our suburb.

The August issue of The Independent Weekly has the story (the whole issue is downloadable as a PDF):

Associate Professor Frank Zumbo,who has studied competition  law for over 20 years, was critical of the proposal. ‘The one thing that emerges from that research over the years is that where you’ve got sectors dominated by a very small number of large and powerful companies, you find that they act as a “cosy club”,’ he said. ‘Where there is just a Coles and Woolworths, the prices there are higher than in those markets where there are strong independents – the evidence is clear from ACCC research.’

Mr Zumbo said there was a danger that if Woolworths opened in Annandale, they could engage in two major forms of price discrimination. ‘One is ‘predatory pricing’, where they can sell below cost, for extended periods of  time, to drive out the local small businesses,’ he said. ‘Once that happens, prices will go up at that Woolworths. The other thing they could  do is engage in “geographic price discrimination”, where the prices at the [Annandale] Woolworths might be lower than other Woolworths stores for a period of time, and once the local competition is gone,  those prices will go back up.

‘[Their aim] is simply to saturate the area to suffocate the local businesses. Woolworths, for example, has five supermarkets already in place within a radius of five kilometres [of the proposed Annandale site]. To put another one is designed to remove what remaining oxygen there is from the independents.’

The Independent is nothing if not balanced, and gives the other side of the argument. A Woolworths spokesperson is quoted as denying predatory pricing practices, and the article continues:

‘Speaking generally, Woolworths brings many benefits to communities,’ said Woolworths Community  Relations Manager, Simon Berger. ‘We deliver convenience, range and value for local customers, which encourages more people to do their shopping locally, reduces the number of people shopping outside the local area, and generates opportunities for neighbouring small businesses.’

Well, maybe. But we saw Glebe Point Road turn into something very different when the Broadway Shopping Centre opened. And soon after Franklins and then Coles opened in Leichhardt, which is a lot further away than this new development, we saw three butcher’s shops wither and die in our locality.

Sam and Kathy have their moment in the Independent‘s coverage as well:

Like any good independent  retailer, Sam knows his customers personally. ‘I just want to be delivering what I can for my customers – the more you can deliver the more they appreciate,’ he says.

Surely, though, there comes a point when one must ask whether the ridiculous hours and stress are worth it. ‘It’s not easy,’ Katia concedes, ‘but I love what I’m doing. I love my customers – you see families grow, and share their problems. It’s a real community feel. You get used to working – it’s not easy for me to let it go.’

Go Sam! Go Kathy!

Added on 23 July: It took some finding, but if you’re interested you can fill out the snap poll being conducted by our state member, Verity Firth