Subsidising rail freight in Victoria

If you have even driven on country Victoria’s highways, you may have noticed the plague of potholes and bumps – all thanks to a constant procession of heavy vehicles kicking the stuffing out of the road surface, combined with a lack of maintenance. Encouraging freight transport to move from road to rail could fix the problem, but it turns out there is already a State Government program in place to do so.

'You still there?'

It is known as the Mode Shift Incentive Scheme (MSIS) and administered by the Department of Economic Development, Jobs, Transport and Resources:

The Mode Shift Incentive Scheme (MSIS) is an incentive program that encourages industry to shift more containerised freight from road to rail.

The aim of the scheme is to increase efficiency and cost effectiveness in the freight sector and reduce congestion on roads in and around freight and port precincts.

In the 2014-15 State Budget, the Victorian Government invested $20 million over four years to continue the scheme.

The successful companies for the latest scheme are:

  • Tocumwal corridor – Patrick Container Ports
  • Horsham corridor – Wimmera Container Line
  • Warrnambool corridor – Westvic Container Export
  • Mildura corridor – Ironhorse Intermodal
  • Deniliquin – Sunrice
  • Maryvale – QUBE Logistics

The program has roots dating back in 2007, when the Victorian Government released a review into the state’s rail freight network. Title ‘Switchpoint‘, the report itself found:

The regional intermodal business is second in terms of significance (in tonnes). This business primarily comprises export containers railed to the Port of Melbourne. Although rail is exposed to considerable competitive pressure from road for this trade, it has grown in recent years partly due to increased containerisation of agricultural products and also because rail can deliver large volumes into port in a single movement compared with trucks.

It also described the freight task itself:

Container trains are operated from Horsham (grain and hay), Boort (grain and hay), Merbein (horticultural products, grain, mineral sands), Mooroopna (food products), Tocumwal (grain and dairy products), Maryvale (paper products), Warrnambool (dairy and agricultural products) and Griffith/south-west NSW (wine, grapes, agricultural products).

And the problems caused by cheap road transport:

Evidence to the Rail Freight Network Review made it very clear that growers, grain handlers, and other rail freight users are extremely responsive to minor variations in posted and actual transport prices and will readily switch from one mode to another in order to capture the margin benefit.

And recommended that government charges for access to the rail network should be lowered, in order to make rail freight cost competitive:

Consequently, RFNR recommends that the Government immediately set access fees at levels competitive with rail access fees elsewhere in Australia for a period of at least five years. There should also preferably be a slight discount or advantage over the pricing of trucks. RFNR acknowledges the reduced access revenue from the reduced rates, but does not see the merit of setting access charges at levels which will not generate any revenue because the business has shifted to road.

It also addresses any concerns about these lower prices being a ‘subsidy’ for rail freight.

If governments are concerned to reduce the subsidy inherent in this approach, the best way to solve that is for the very high subsidy in long range road transport to be progressively reduced so that rail access pricing with its triple bottom-line advantages over road can be given more pricing headroom.

The state government took the recommendations on board, and in the 2008/09 State Budget allocated $21.4 million over two years for the ‘Rail Freight Support Package’ – a program to provide rebates to container terminal operators in country Victoria, and reduce access charges for exporting grain.

The container rebate was payable for containers moved by rail from Warrnambool, Horsham, Mildura and Shepparton/Tocumwal, and was based on a benchmark rate of $100 per 20 foot equivalent container adjusted for volume and distance.

In 2011/12 the Rail Freight Support Package was extended for another year at a cost of $5 million, and again in 2012/13 – but this time, under a new name.

$10 million incentive to move regional truck trips to rail
3 July 2012

Minister for Public Transport Terry Mulder today (3 July, 2012) announced the successful recipients of funding for its new $10 million rail freight incentive scheme.

The Victorian Coalition Government’s new Mode Shift Incentive Scheme (MSIS) aims to encourage the use of rail freight and relieve congestion on Port of Melbourne and regional roads.

Mr Mulder said the six companies which received funding had committed to moving almost 50,000 containers or the equivalent of 65,000 truck trips into and out of the Port of Melbourne by rail instead of road.

“The Coalition Government is committed to increasing the amount of freight carried by rail in Victoria and this is a major boost to rail freight,” Mr Mulder said.

“This new initiative increases the mode shift commitment to six companies from four under a previous program, greatly increasing the number of containers being moved by rail and encouraging competition.

Mr Mulder said the MSIS encouraged industry to increase the amount of freight carried on rail by providing incentives to move containerised freight movement from road to rail.

In order to be successful, applicants had to compete for funding and demonstrate they could provide the greatest economic, environmental and social benefits from reducing truck movements and shifting to rail.

“Promoting competition and adopting a rigorous approach to calculating the benefits has enabled an increase in the number of companies receiving funding and the overall number of containers being moved by rail by around 16,000 per year,” Mr Mulder said.

“We have had a great response to the scheme, demonstrating there is a strong interest and commitment to moving more freight on rail.”

Minister for Ports Denis Napthine said the containers moved on rail are all destined for the Port of Melbourne and will include products such as containerised grain, meat, dairy, fruit and wine.

“We are committed to retaining the Port of Melbourne as Australia’s largest container port” Dr Napthine said.

“This scheme not only encourages greater efficiency and innovation in the freight sector, it also reduces road congestion in and around the port.”

And fast forward to the 2014-15 State Budget, and another $20 million over four years was allocated to the program, but since deprioritised for 2015/16 onwards.

Member for Western Victoria Simon Ramsay had this to say on the removal of funding, while also sinking his boot into the Labor government:

Andrews Government abandons rail freight subsidy
26 February 2015

Member for Western Victoria Simon Ramsay has raised concerns in State Parliament that the Andrews Labor Government has discontinued funding for the Mode Shift Incentive scheme.

Mr Ramsay said the Mode Shift Incentive scheme, a little-known program that is highly effective, was introduced as part of the Napthine Government’s policy of growing freight on rail.

“The Mode Shift Incentive scheme was a key initiative of the Coalition’s freight strategy, Victoria — the Freight State, and was introduced in 2012–13 to replace the former Brumby Government’s failed Freight Rate Subsidy scheme.

“The Freight Rate Subsidy scheme was a maladministered cash transfer to freight companies to carry containers.

“In the last Budget the Coalition provided an allocation of $5 million per year to the Mode Shift Incentive scheme and in 2013–14 over 49 000, 20-foot equivalent unit containers were moved by rail rather than road, up from 33 500 in previous years.

The Rail Freight Alliance, a group of 25 rural and regional Local Government Councils from Central and Western Victoria and Southern NSW, also had this to say about the merry-go-round of funding:

Because the Mode Shift Incentive Scheme (MSIS) is renewed annually in the Victorian Budget, it does not provide long term certainty for investment by intermodal operators.

The total amount of funds provided, though useful, is extremely limited especially when compared with subsidies and infrastructure provision afforded to road freight operators.

While the Public Accounts and Estimates Committee meeting on 15 May 2015 gives the last word on the topic:

Mr D. O’BRIEN — I also note that in Labor’s Financial Statement it was listed as an initiative to be reprioritised. I guess my question straight out is: has this program been cut, or will it be continuing into the forward estimates?

Ms ALLAN — Yes, and you are obviously familiar with the project and what that means in terms of assisting the industry to move from road to rail. That is something that is also important to this government, and it has been a program that was designed to encourage businesses to shift the transport of their export containers from road to rail. And we did intend initially to reprioritise funds. However, on coming to government we have since become aware that the previous government had signed a four-year funding agreement with four companies who were to receive the funding from that scheme. That obviously does not expire for another three years. We will be honouring these existing agreements, and indeed I have written very recently to those companies informing them of that intent.

Looks like both the Member for Western Victoria and the Rail Freight Alliance were right to criticise government screwups!

G525 stabled at the up end of the yard, as unloading continues

Further reading

Intermodal terminals across Victoria

Alternate V/Line routes across Victoria

If you take a look at the V/Line’s network map, it seems very simple – each railway line radiates directly from Melbourne, with no connections between them. It may also make you think that many journeys across Victoria require a stopover in the big smoke, and any minor disruption along the way results in an entire line being shut down – but that isn’t necessarily the case.

V/Line network map circa 2014

The reality becomes apparent when you look at a map showing the entire Victorian railway network – there are a web of lines covering the entire state, and for cities such as Geelong and Ballarat, there multiple way to reach Melbourne by rail. So why doesn’t V/Line use them?

Victorian railway network map circa 2014

Let us start with the alternate routes through the suburban area.

Southern Cross to Sunshine via the suburban tracks

Before the first stage of Regional Rail Link opened to passenger trains in 2014, V/Line services to Ballarat and Bendigo used the suburban tracks between Southern Cross to Sunshine. This route is still available today, so if anything happens on the Regional Rail Links between the city and Sunshine, V/Line trains should still be able to operate.

VLocity 3VL37 arrives into Footscray on the suburban tracks to Sunshine

Southern Cross to Werribee via the suburban tracks

V/Line Geelong services moved onto the new RRL tracks in 2015, having used the suburban tracks via Newport and Werribee before this time. Again, this route is still available today, so if the Regional Rail Link tracks develop a fault, Geelong trains could still travel via the ‘old route’.

VLocity 3VL50 leads a down Geelong service through Laverton station

In suburban Melbourne, there are also a number of nominally freight-only tracks that V/Line trains can travel over.

Southern Cross to Sunshine via the goods lines

If something goes wrong with both the Regional Rail Link and suburban tracks west of the city, there is actually a third route to Sunshine! These freight tracks link South Kensington to Sunshine, passing through the Bunbury Street Tunnel beneath Footscray station and then paralleling to the normal passenger route as far as Sunshine.

Unfortunately using this link is slow going for passenger trains – a 15 km/h speed limit applies for the section of track that passes Tottenham station, and due to the tracks being shared with freight trains, long delays can occur while they pass through flat junctions.

V/Line train still waiting at Tottenham Junction, as the pair of NR class locomotives on a freight train get the signal to go

Southern Cross to Newport via the goods lines

In addition to the freight-only tracks from South Kensington to Sunshine, another freight route heads south to Newport, allowing Geelong trains a way to avoid the suburban tracks that pass through Footscray and Yarraville.

As with the previously mentioned freight line, slow speed limits and conflicts with the freight trains that normally use the line limit the usability of this alternate route for V/Line services.

Diverted V/Line Geelong service stopped at a signal at Brooklyn - we must have been caught up to the freight train ahead of us

Southern Cross to Broadmeadows via the goods lines

The final freight-only route in suburban Melbourne is the Albion-Jacana line – it links Sunshine to Broadmeadows via Airport West, and allows Seymour-bound services to avoid the suburban tracks via Essendon.

Subject to an incredibly slow 20 km/h speed limit due to the poor track condition, the only upside of this route is that only a handful of freight trains use it each day, so getting a clear run isn’t hard.

Diverted Shepparton service crawling along at 20 km/h on the broad gauge track of the Albion - Jacana line

Once outside of Melbourne, the number of alternate routes multiplies.

Ballarat via Geelong

The Geelong-Ballarat railway line exists for freight traffic, leaving the main Geelong line before North Geelong station, and joining the main Ballarat line just outside the township of Warrenheip.

Up until the late 1990s V/Line would occasionally divert Ballarat services via Geelong in order to free up space on the single track through Bacchus Marsh. As to why regular services don’t use today, the route is almost twice as long as the normal route, it is subject to a slower 80 km/h speed limit, and the line between Geelong and Gheringhap sees busy interstate freight traffic, which could get in the way of regular passenger services.

Pacific National grain train running through the empty station at Lal Lal

Bendigo via Ballarat

Once upon a time there were two alternate routes to reach Bendigo by rail!

The first approached the city from the south and passed through Ballarat, Maryborough and Castlemaine, using the Moolort railway line.

Unfortunately for anyone wanting to run a train this way, the section of line between Moolort and Maldon Junction has been ‘booked out of use’ since 2004, with the section of line between Castlemaine and Maldon Junction being turned over to tourist services operated by the Victorian Goldfields Railway.

V/Line VLocity railcar at Maryborough station

And the second entered Bendigo from the other side of town Eaglehawk–Inglewood line: trains would pass through Ballarat, Maryborough, Dunolly and Inglewood; then change direction and head through Bridgewater to Eaglehawk, and arrive into Bendigo from the north.

Like the first diversion route to Bendigo, the line via Bridgewater has also been ‘booked out of use’ and has not been used by any form of train since 2007.

El Zorro grain services passes the yard and silos at Dunolly station

Echuca via Seymour

Trains to and from Echuca also have another route to Melbourne, via Seymour and the Toolamba–Echuca railway line. After a number of years of disused, the line was recently brought back up to a standard to carry freight trains from Deniliquin, allowing them to avoid the busier passenger route via Bendigo.

Station stop at Nagambie for a Seymour Railway Heritage Centre operated train

Finally, here are some really oddball diversions that I doubt V/Line would never consider using.

Ararat via Geelong

Ararat is served by V/Line services that run on the broad gauge tracks via Ballarat. However there is a separate standard gauge route to Ararat, as used by interstate Melbourne-Adelaide freight services and GSR operated The Overland passenger train.

Hence if V/Line had spare standard gauge rolling stock (which they don’t!) then they could run a service to Ararat via Geelong, Cressy and Maroona.

VLocity VL27 in the board gauge dock platform at Ararat station, with the relocated Ararat A signal box alongside

Why doesn’t V/Line use any diversionary routes?

Seeing V/Line trains diverted onto nominally freight-only tracks in suburban Melbourne is a rare sight – my most recent examples are an unplanned diversion of Geelong trains via Brooklyn in 2007, and a planned diversion of Shepparton trains via Albion-Jacana in 2010. As for the rest of the examples I’ve given, I’m struggling to think of any examples in the past decade of V/Line passenger carrying services making such diversions.

Sending passenger trains along routes isn’t easy – for a start, the tracks in suburban Melbourne were specifically built to separate freight trains from passenger services, so introducing any additional trains onto them is a recipe for long delays.

VLocity VL11 on a down Ballarat service at Parwan Loop, running past an El Zorro operated grain train

In addition, there is a concept called ‘route knowledge‘ that limits where train can go. Unlike road transport, where anyone can pull a drivers license out of cereal box, train drivers are required to learn each route they will drive trains along, and memorise the location of features such as station platforms, junctions, signals, lineside structures, level crossings, sharp curves and steep grades.

Learning all of that information takes some time, and there is also a gotcha – if a train driver doesn’t drive a train along a given route for a given period of time (normally 2 years) a train driver’s route knowledge will lapse, rendering them unqualified to drive along the route.

The end result is that all rail operators needs to keep their train crews qualified on the routes they drive along, which presents V/Line with difficulties given their crews never have a reason to drive trains along random routes through the Victorian countryside.

Future problems?

While V/Line train crews still have the route knowledge to operate trains along the suburban tracks in Melbourne, with the opening of Regional Rail Link V/Line trains now stick to their own independent set of tracks, separate from those used by Metro Trains services.

Comeng train on a down Werribee service arrives into Footscray on the suburban lines, with a V/Line train on the parallel RRL tracks

This raises the question – will V/Line ensure that their staff retain their qualifications, or in two years time will a fault on the RRL tracks result in V/Line passengers being loaded onto replacement buses, while electric trains cruise past on the perfectly usable suburban tracks alongside?

So far, the signs seem to be positive – a number of passenger carrying V/Line services have been diverted onto the suburban trains via Sunshine due to various issues, V/Line trains head to Newport for maintenance, and a handful of empty trains have been sent over the otherwise redundant tracks between Werribee and Little River to keep the rails clean.

V/Line 1, Marcus 0?

Last week an incident on the tracks at Deer Park disrupted all V/Line services that use Regional Rail Link – Ballarat services were shut down, but Geelong trains were sent via the ‘old’ route via Werrribee, and Bendigo services were sent around stuck V/Line trains via the suburban tracks to Sunshine.

Passengers for Wyndham Vale and Tarneit were directed to Werribee line services and then a connecting suburban bus, while passengers for Ardeer through Melton were directed to suburban buses operating out of Sunshine.

Hopefully V/Line will take the same approach during future disruptions!

Useless shelters at Melbourne railway stations

Melbourne is a city known for bad weather – so why is finding adequate weather protection at our railway stations so hard?

Bus in the fog outside Footscray station

Edmund Carew of Windsor had this to say in a recent edition of The Age:

Beyond capacity

Shivering at South Yarra station recently and comparing a new, narrow and almost useless platform shelter to the older full-width ones gave time to consider why the Victorians and Edwardians could build infrastructure properly, unlike in Victoria today. With Public Transport Victoria and Metro unable to build shelters that properly protect rail users from driving rain, Victorians can have little confidence that Daniel Andrews and Jacinta Allan will be able to build any new railway lines properly (“Metro to tunnel under Yarra River”, 5/8.)

Already, Ms Allan says there won’t be new platforms at South Yarra despite the huge residential and office growth in the past decade. The mostly unfunded Melbourne Metro is grossly deficient before a tunnel sod has been turned.

A few days later, two more readers chimed in on the topic:

No shelter for travellers

Edmund Carew (Letters, 7/8), I hear you loud and clear. The new West Footscray station is a huge monolith that is so badly designed that even the “covered” walkways and platform don’t provide shelter from the rain. Most people huddle near the myki machines to get respite from the cold, wind and rain. It beggars belief that someone was paid big bucks to design this thing and yet not one single person in the whole process thought about appropriate shelter for commuters. Epic fail.

Mina Hilson, West Footscray

One seat for allcomers

At least you got a platform, Edmund Carew. On the 86 tram route on Smith Street in Collingwood, a single seat has been installed at a stop. In the streets surrounding this lonely perch, 3000 apartments are due for completion in the next year, and who knows how many more after that. Not to mention those already built. The mind boggles.

Benjamin Doherty, West Melbourne

North Melbourne railway station was upgraded in 2009, and is an early example of Melbourne’s trend towards architectural wankery trumping weather protection – the new concourse is high up in the air, with nothing to prevent windblown rain from drenching waiting passengers.

Wet, wet, wet at North Melbourne - the 'roof' is useless...

A year later a brand new footbridge at Footscray opened – while it features both a roof and wall, both are studded with holes that let water in every time it rains, earning it the ‘colander bridge‘ nickname among locals.

Inadequate weather protection on the 'colander footbridge' at Footscray

Thankfully as part of the Regional Rail Link project, Footscray station received a second round of upgrades, including:

sealing the perforated panels on the William Cooper pedestrian bridge to improve weather protection

However the project team didn’t learn much from their work at Footscray – the new overhead concourse at Sunshine station has a roof, but no walls!

Rain is also getting in through the mesh walls on the overhead concourse at Sunshine

Hopefully those building our railway stations charge will work it out with their next upgrade project!

A comparison

Welcome to North Melbourne station – the modern verandas at the city end do nothing to shelter waiting passengers.

Wet day at North Melbourne, and the modern verandas do nothing to shelter passengers

But walk 50 metres to the heritage listed end of the platform, and the original verandas keep you bone dry.

Wet day at North Melbourne, and the original verandas protect passengers from the rain

It sure takes some skill to take something that works, and build something next door that doesn’t!

Transport planning and a supermarket relocation

Many things are taking into consideration when planning public transport routes, but I never expected that the relocation of a Coles supermarket would result in the creation of a brand new bus route.

Entrance to a Coles Supermarket

In August 2015 Public Transport Victoria announced the creation of a new bus service in Pascoe Vale:

Temporary Route 560 Bus
6 August 2015

A new Pascoe Vale bus service, Route 560, is being introduced on Saturday, 8 August so the community can continue to do their shopping locally.

With the local Coles supermarket relocating from Pascoe Vale to Sussex Street in Coburg North, it was identified that we needed a transport solution so the community can continue to do their grocery shopping.

The bus shuttle will operate between Pascoe Vale Station and the corner of Gaffney and Sussex Streets. From Pascoe Vale Station, the bus will depart from the existing Route 542 bus stop in Railway Parade, turn onto Gaffney Street, then travel along Cumberland Road, O’Hea Street, Sussex Street and terminate at the existing bus stops on Gaffney Street near the new Coles.

The bus service will operate every 40 minutes, 9.30am to 4pm, seven days a week.

The old supermarket was located in a small shopping centre at the corner of Gaffney Street and Cumberland Road.

Coles supermarket on Gaffney Street, Pascoe Vale

While the new supermarket was just one kilometre to the east, at the corner of Gaffney and Sussex Streets.

Coles bought the site of the new supermarket in 2010:

Coles Group Property Developments bought the 17,500 square metre site at 180-196 Gaffney Street for $6.297 million in mid-2010.

The property was previously leased to fellow Wesfarmers subsidiary Bunnings but was vacant for about three years after Bunnings moved to elsewhere on Gaffney Street. The building then burnt down.

Then applied for planning permission in 2013

Coles plans to spend more than $21 million to open a shopping centre in Coburg to counter rival Woolworths in the area.

The development in Gaffney Street is expected to drain millions of dollars from its competitors but will likely come at the cost of closing at least one of Coles’ own outlets nearby.

Coles has applied for a zoning change and planning permission to build a $15 million mixed-use ”Neighbourhood Business and Retail Centre” on the corner of Gaffney and Sussex Streets.

The mooted project would include a full-line 4000-square-metre Coles supermarket, 1200 sq m of shops, 760 sq m of office space and a medical centre.

In an economic impact assessment tendered to Moreland council on behalf of Coles, MacroPlan Australia said the centre could expect to generate $33.3 million in sales a year and create about 230 jobs.
Approval for the development would mean Coles had three stores in the surrounding trade area, compared with one for Woolworths and one for IGA.

But the creation of the centre could lead to closure of the ageing Coles store next to the Coburg railway station, the report said.

MacroPlan found that store was ”under trading” due to negative perceptions on its former use as a Bi-Lo outlet and the ”high quality” Woolworths supermarket nearby.

A Coles spokeswoman said ”no decision” had been made about the future of the existing stores. ”It’s early days and the proposed plan to consolidate the two Coles stores located on Sydney Road and Waterfield Street is still under review,” she said.

In the end, the closure of the older Gaffney Street store was a given, but local residents weren’t happy when it was announced in 2014:

Pascoe Vale residents are upset at a plan to close their neighbourhood supermarket.

Lyn Belcher and Graeme Wilde are among shoppers voicing discontent with a Coles proposal to close the Gaffney St supermarket – near the corner of Cumberland Rd – and replace it with a First Choice Liquor outlet.

But Coles says its new supermarket, planned for the corner of Gaffney and Sussex streets, will serve the needs of the whole community.

Even Federal Member for Wills Kelvin Thomson got involved with the protest, writing a letter to Coles management.

The new Coles store at Coburg North opened on Saturday 9th August, 2015.

As for the new bus route

From what I can tell, the new route 560 bus was a result of local member Lizzie Blandthorn raising the issue with Minister for Transport Jacinta Allan, who then pushed Public Transport Victoria to make the required changes.

Craig on the Bus Australia forums also has more detail on the new bus route:

I’ve got to hand it to PTV – when they get pushed, they can turn around changes to the bus network very quickly!

On nearby supermarkets

Last week I blogged about supermarket chains poaching their own market share – the duplicated Coles stores in Coburg are just one example.

When supermarket chains poach their own market share

Australia’s supermarket sector is a cosy duopoly between Coles and Woolworths, but sometimes you’ll find two stores owned by the same company located right next door to each other. So why does it happen?

Entrance to a Coles Supermarket

Growing up in Geelong there were many examples – the first being two Woolworths supermarkets on Queenscliff Road in Newcomb, Victoria. Only 500 metres separate these two stores, each anchoring a similarly sized shopping centre – the first at Newcomb Central, and the second at Bellarine Village. The latter store was a Franklins store until 2001.

Only 500 metres between two Woolworths supermarkets in Newcomb, Victoria

On the other side of Geelong is a pair of Coles Supermarkets on High Street, Belmont. At the bottom of the hill there is a full-line Coles and Kmart anchored shopping centre, with the supermarket 750 metres down the road in the main shopping strip being a former Bi-Lo outlet, rebranded back in 2006.

Only 750 metres between two Coles supermarkets in Belmont, Victoria

In Melbourne there are some even more extreme examples of co-located supermarkets. On Hampshire Road in Sunshine there are two Woolworths supermarkets across from each other – one in the Woolworths owned ‘Sunshine Marketplace’ shopping complex, and a second store in the ‘Sunshine Plaza’ complex across the road.

Two Woolworths supermarkets next door to each other in Sunshine, Victoria

But the two Coles supermarkets in Coburg are the most extreme example, with only the store carpark separating the two outlets!

Two Coles supermarkets next door to each other in Coburg, Victoria

Located next door to railway station in the main Coburg shopping strip, one of the stores has always been as a Coles, while the other is yet another rebranded Bi-Lo store.

Two Coles supermarkets next door to each other in Coburg, Victoria

So why would a major supermarket chain decide to keep one store open when they already have a second store right next door?

To find the answer, there are two supermarkets on Geelong’s Shannon Avenue provide a perfect explanation. With only 900 metres separating them, the supermarket at the Newtown end is still owned by Woolworths, but the nearby supermarket in Geelong West is now a Coles outlet.

Only 900 metres between two Woolworths supermarkets in Newtown, Victoria

The story starts when Safeway and Woolworths were still separate companies, with each operating a store on Shannon Avenue.

New BWS signage with the old Safeway branding

Both stores continued trading for years, until Woolworths opened a much larger supermarket on nearby Pakington Street in 2008, following much community angst. The northernmost Shannon Avenue store was then closed down, but Coles snatched up the empty building and opened their own supermarket on the site in 2008.

Given their experiences in Geelong West, I’m guessing that for Coles and Woolworths running two adjoining stores for a marginal profit is better than to give up a site (and market share) to the other half of the duopoly!