Coles and Woolies fuel schemes under scrutiny

Supermarket giants Woolworths (ASX: WOW) and Wesfarmers (ASX: WES) – owner of Coles — have found themselves under fresh criticism, this time from a coalition of independent retailers calling themselves Independent Retailers of Australia, according to a report on

The Independent Retailers of Australia are voicing their concerns surrounding fuel discounts being offered by the majors, arguing the fuel schemes are “detrimental to competition and would drive many independent retailers out of business because they were unable to compete.”

It’s not the first time Coles, which uses co-branded Shell outlets and Woolworths, co-branded with Caltex (ASX: CTX), has come under scrutiny. Previously the head of the Australian Competition and Consumer Commission, Mr Rod Sims, has voiced his concerns as well.

In response to the criticism, the majors have pointed out the savings Australian families have enjoyed thanks to fuel discount offers.

Foolish takeaway

The fuel scheme has allowed the supermarket giants to expand into fuel retailing and importantly the convenience store space, too. No matter what the end result of fuel schemes, Coles and Woolies are now major players in the fuel and convenience retailing industry.

The supermarket giants pay dependable dividends but their yield has been squeezed as their share prices march higher, which is why The Motley Fool has a better stock idea. Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now