7-Eleven Stores Pty Ltd Reduces, Freezes Prices on Grocery Items After ACCC Concerns

Prices of about 150 dry grocery items are likely to come down by an average of 5.6 per cent at 7-Eleven convenience stores following an investigation by the Australian Competition and Consumer Commission. The prices of another 600 dry grocery items are likely to be frozen until 30 June 2002.

7-Eleven Stores Pty Ltd, the franchisor of about 265 franchised 7-Eleven stores in NSW, Victoria and Queensland, has recommended to its franchisees that they reduce the prices on about 150 dry grocery items by an average of 5.6 per cent. 7-Eleven has also undertaken to recommend to its franchisees that they freeze the prices on another 600 dry grocery items, that may be available from these stores. This action follows an investigation by, and discussions with, the ACCC.

Both the price reductions and price freeze were recommended to take effect by this week and remain in place until 30 June 2002.

7-Eleven undertook this action to allay concerns held by the ACCC that its recommended retail prices for certain goods from 1 July 2000 did not fully reflect the abolition of Wholesale Sales Tax in wholesale prices from some suppliers. On the basis of those wholesale prices, the ACCC considered that 7-Eleven's recommended retail prices were too high. 7-Eleven's post-GST retail prices were not revised following revisions to wholesale prices.

"7-Eleven's advice in recommending reductions and a temporary price freeze to franchisees for hundreds of convenience store grocery items provides benefits for consumers", ACCC Chairman, Professor Allan Fels, said today. "The products affected by 7-Eleven's price reductions and price freeze include: dog and cat food; paper products; and household cleaners and detergents".

Beginning in late 1999, the ACCC has conducted regular retail price surveys across an extensive range of products and locations. These surveys have been effective in helping to identify a number of cases of questionable repricing, such as in this case involving 7-Eleven. The ACCC has obtained price reductions in other situations where it has concerns about repricing of consumer goods and services following the introduction of the New Tax System.

The ACCC's role of investigating New Tax System-related price concerns identified through its surveys or consumer and business complaints continues until 30 June 2002.