Amazing shop prices in Barunga and Timber Creek

Amazing shop prices in Barunga and Timber Creek

AIG is managing two stores in the Top End: Bagala Community Store in Barunga and Wirib Store in Timber Creek. Since the COVID-19 travel restrictions have been in place, sales in both stores have risen by almost double. The rise is not unexpected given the limited shopping options for people in lockdown.

What is unexpected is AIG’s response to reduce the prices in the store even further.” We want everyone to be able to afford to their full grocery shop it our stores because we believe it is our moral obligation to make fresh fruit and vegetables affordable. This is not the time to be making a profit off essentials” says Steve Smith, AIG CEO.

How can we reduce prices further?

Economies of scale is the savings made by a company when production is increased, and costs are lowered. In the case of the stores, ordering in bulk from suppliers reduces freight costs per unit item which means it costs less overall to supply the store. Instead of pocketing the savings, AIG is lowering the prices in the store according to the cost reduction. This means amazing community store prices, the blow even Katherine Woollies out of the water.

You can read more about economies of scale here https://www.investopedia.com/terms/e/economiesofscale.asp

To give you some examples; these are the prices this week in the AIG stores compared to Woolworths in Katherine.

 

AIG

Woolworths

Ginger kg

$16.20

$45.00

Sweet Potato Gold kg

$2.10

$4.90

Cherry Tomatoes 250gm punnet

$1.65

$3.50

Zucchinikg

$3.85

$5.90

Carrots 1kg bag

$1.80

$2.00

Continental Cucumbers each

$0.90

$1.50

Capsicum Green kg

$5.45

$6.90

Capsicum Red kg

$5.90

$7.90

Pumpkin Butternut kg

$1.85

$4.00

Potatoes Washed 2.5kg

$3.20

$3.50 2kg

Tomatoes kg

$4.00

$6.90

 

 

 

Lemons kg

$3.15

$6.00

Watermelon kg

$1.35

$1.90

 

 

 

Chicken Wings kg

$5.80

$7.50

 

Will prices go up again after travel restrictions are lifted?

That all depends on how much people shop in the stores. Back to the economies of scale, if production remains high and stores remain ordering in bulk, the prices can stay low. If people head into Katherine again to buy their groceries again, the prices will rise accordingly. The bottom line is if people want store prices to remain low, they need to keep shopping there.

Why don’t other store management groups do this?

The biggest differentiator is that AIG is not managing stores to make a profit. AIG is managing the stores because it believes prices gouging in community store is wrong. We care is the bottom line for what we do and why.

We are a small and agile and can constantly adjust the prices and the products from suppliers because we are dealing with smaller quantities and supplies to two stores only. We don’t accept rebates from suppliers (monetary incentives to stock products) which makes us more able to be agile in what we stock in the stores.

We also appreciate that each community is different and needs different stock. Timber Creek for example has a huge volume of tourist traffic through the store while Barunga is a small community of about 300 people that has few outside visitors. Being responsive to the needs of the community means we are stocking products that people want and will buy, which helps in the moving stock and keeping costs down.

Food security for Aboriginal people

AIG has long been vocal about inexcusably high prices in Aboriginal community stores throughout the Top End. In some stores people are expected to pay to double the shelf price of products in Darwin and Katherine which means people just cannot afford to buy what they want. They go without or buy low quality food instead: a meat pie for dinner instead of chicken, veggies and rice for example. These food choices directly impact the incidence of chronic diseases such as heart disease and diabetes.

Also, the very idea that businesses would price gouge and profit off the poorest and most vulnerable people in the country, in our opinion is intolerable and needs to be called out and stopped.

COVID has made it worse

The COVID -19 restrictions of travel in and out of communities have compounded the food affordability issue further. In the past, to cope with high store prices, people have gone to the larger towns to do their shopping. Now they can’t, making food security for people more vulnerable than ever.

What can you do if your store prices are too high?

Contact the store management team at AIG on 08 8922 2666 and have a chat. The very least we will do is to make some noise on your behalf. How can the wider community know about unfair pricing if they don’t know it’s going on? We can help you to make your struggle seen.

What next for AIG?

In our opinion this issue is at the centre of food security issues for Aboriginal people in the NT and has become a topic close to the heart of AIG CEO Steve Smith. We will continue to find the lowest prices for the stores that we manage, and advocate for the food security in the NT.