Why Mark Ritson has it wrong on Coles
This week, Mark Ritson wrote a piece for Mumbrella in which he argues that Coles may be slapped on the wrist by the ACCC, but it won’t impact its reputation among Australian shoppers. Craig Badings, partner and co-lead reputation practice at SenateSHJ, offers a rebuttal to Ritson’s argument.
Will Coles' reputation go down down?
In his recent Mumbrella column, Mark Ritson argues that the ACCC’s action against Coles over pricing is purely a legislative matter. Coles, he suggests, may face regulatory consequences, but there will be no meaningful reputational damage.
But reputation today rarely collapses overnight for major incumbents. It thins out. Quietly. Gradually. Then structurally. And when it does, the financial consequences are neither theoretical nor confined to communication metrics.
We know this because we track it.
Have enjoyed both sides of this debate and see merit in both angles. Would love a follow-up piece on how Coles can rebuild after this reputational damage.
Great article, spot on.
Craig Badings makes a compelling academic argument. But it doesn’t hold up against basic reality.
1. Grocery prices aren’t even the biggest pain point
Australians are getting smashed on energy, rent and insurance. Grocery pricing is annoying, it’s not existential. The reputational catastrophe thesis assumes groceries sit at the top of people’s minds. They don’t. Not having a roof over your head or being able to keep the lights on are way bigger priorities.
2. Where are people supposed to go?
Coles and Woolworths own roughly two-thirds of the market. The “damaged reputation leads to customer defection” argument only works when real alternatives exist. For most Australians, they don’t. Switching supermarkets isn’t a political statement, it’s a big logistical inconvenience most simply won’t bother with. Legislation can change pricing rules. It won’t change the proximity of supermarkets near your house.
3. The thin margins defence is doing two contradictory jobs
Badings argues that because supermarkets run on thin margins, trust is their critical operating asset: the very thing holding the whole machine together. But Coles’ gross margin is 26.6%. The 2.4% net margin comes after $44.5 billion in revenue has been filtered through wages, leases and logistics. So the thin margin framing is technically true and strategically misleading at the same time. You can’t argue Coles is a lean, margin-pressured business while it books $1.08 billion in annual profit from a captive customer base. The thin margin argument generates sympathy and implies vulnerability. But the actual numbers describe a business that is structurally protected, not structurally exposed.
4. His trust argument assumes a competitive market that doesn’t exist
Yes, trust functions as a behavioural asset. But trust only matters economically when it can be withdrawn: when there are alternatives. In a genuine market, eroding trust triggers defection, defection triggers revenue loss, and revenue loss produces the financial damage his Crisis Index 300 describes. That chain only works if step two is possible. In Australia’s grocery duopoly, it isn’t. Woolworths is under identical ACCC scrutiny for identical behaviour for goodness sake, going to trial on April 20, 2026.
Ritson 1 Badings 0
Whilst this makes for an interesting read and probably even better meeting room Powerpoint, it doesn’t address the reality of the fact that the average Australian has to put some groceries on the table. And dollar or two here is not top of mind compared to all the inflationary factors and lack of real choices in their lives, no matter how compelling a global framework appears.
Speaking from my own personal experience, I doubt very much that either Woolworths or Coles would ever be concerned about reputational damage in the slightest.
For the most part, the supermarket that gets my business is the one which is closest to my home, has the easiest access or happens to be the one that I pass on my commute.
love a sample size of n=1. it must be true.
they will care about it big time when it impacts profitability … if Aldi / IGA / a new competitor ever starts to do a better job of repositioning the “oligopoly 2” as the bad guys