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Tuesday, September 13, 2016, 12:28

A tale of two duopolies: HK’s abysmal supermarket chains

By Paul Stapleton

The recently announced engine problems experienced by ANA, the Japanese airline, on the new Boeing 787, raise interesting comparisons, oddly enough, with Hong Kong’s supermarkets.

A tale of two duopolies: HK’s abysmal supermarket chains ANA has announced that the engines in up to all 50 of its Dreamliners will need to have a turbine blade replaced, which they expect will ground many of their flagship planes resulting in the cancelation of hundreds of flights until the end of next month. This is clearly a setback for Boeing, which is in a decades-long competition with archrival Airbus to build state-of-the-art aircraft. It is no secret that a quick fix is critically important given that their Dreamliner is in direct competition with Airbus’ cutting-edge product, the A350, which has just started arriving at airports in the last year or so.

It is true that few people actually enjoy the conditions aboard modern-day aircraft, especially back in steerage. But there is little doubt that the experience of flying has made remarkable advances over the years with better quality air, noise reduction, enhanced seat-back entertainment and even food (granted, only if you are in business class). My recent trips in Airbus’ A380 super jumbo and Boeing’s Dreamliner have been noticeably more pleasant. The push-button shading on the 787’s windows and the appreciably quieter ride on the A380 were pleasant little luxuries that made my trip in “cattle class” a bit more bearable. And these advances have come while prices for tickets have actually declined in real dollar terms over the years.

One of the reasons for this great advance is the duopoly held by Boeing and Airbus. Their stranglehold on the wide-body aircraft market may appear anti-competitive, but the ferocity of the competition between them to develop planes that fly passengers more comfortably while keeping down fuel costs is a textbook illustration of the benefits wrought by competition.

With this successful duopoly as a backdrop, it is disconcerting that our local duopoly has generated exceedingly few benefits for Hong Kong consumers. The duopoly I refer to concerns the two large supermarket chains in town. While Boeing and Airbus nip at each other’s heels leading to better and better aircraft and an accompanying smoother ride, the Hong Kong consumer continues to be forced to endure a substandard shopping experience under the local supermarket duopoly.

Seldom does one enter one of the two chains without having to squeeze through cluttered aisles piled high with boxes only to find one’s favored product has sold out or been priced incorrectly. “Fresh” greens sit uncooled and unmoisturized, and if it is avocados or blueberries you are after, there’s a 50-50 chance you will have to discard them after going home and finding they are not fit to eat. Long lines at peak times weave back through the aisles while cashiers waste time fumbling over discount stamps or arranging a delivery shipment. After finally paying the cashier, the space for packing up is woefully inadequate. This list of grievances could be very long indeed.

It is certainly true that Hong Kong presents its own unique set of challenges for food retailing, including high property prices and very little local produce. An argument can also be made that it is the Hong Kong consumer, acutely sensitive to price increases, who is to blame for the abysmal supermarket experience in this shopper’s paradise. Under this line of thought, the duopoly provides minimalist service in order to keep prices low. Still, these appear to be weak excuses for such appalling service, especially given that the duopoly’s parent owners are rich corporations.

Comparisons with any one of the big supermarket chains in Europe or the US are downright depressing. There, one can actually look forward to leisurely browsing in wide, clutter-free aisles. The fresh produce is well looked after and the check-out experience is mostly quick and hassle free. Shopping in one of the two big chains in Hong Kong is a study in contrasts. Virtually no one looks forward to the experience here.

In this food-oriented town, where a common greeting in the local tongue inquires whether one has eaten yet, it is remarkable that the act of purchasing the most fundamental consumable is such an unpleasant experience. This anomaly is underscored by the intensely competitive environment here, where under normal circumstances substandard service providers quickly go out of business.

In a city that does so many things right — the airport and the MTR quickly come to mind — surely it is time for our local duopoly to learn from their avian cousins and start providing a more reasonable shopping experience.

The author is an associate professor at the Education University of Hong Kong.

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