IGA closure blamed on supermarket giants

A retailer lobby group says the closure of an independent supermarket in Mount Isa this week is a bad sign for retailers in smaller outback communities.

The Walter's Supa IGA supermarket at Townview is set to close its doors for good on Sunday.

The Master Grocers' Association's Jos de Bruin says Coles and Woolworths crowd out small businesses and retailers in smaller towns should be worried.

"That market share is only going to increase," he said.

"Who is going to suffer? Will they be supplanting the existing business?

"So in other words, 'we'll go into that town, we'll build a supermarket and let's compete with this independent'.

"But what will happen? Who will last the longest?

"What we see is there's a risk of that particular chain store supplanting the independent."

He says Coles and Woolworths together account for 80 per cent of spending on groceries and stores like the Mount Isa IGA are finding it hard to compete.

"Coles and Woolworths are massive conglomerates and if they need to in their businesses, they can actually cross-subsidise," he said.

"So in the case of Mount Isa, what I fear is that there is now a lessening of competition, a lessening of consumer choice, a lessening of diversity.

"These are the things that are at risk with the continuous market dominance and growth of Coles and Woolworths."

Source: ABC News, 16 August 2012