Surprising reason why you spend more at Coles and Woolies

As the cost-of-living crisis rages across the country, experts have weighed in on why shopping at the supermarket giants may cost more than Aldi.

Amid a cost-of-living crisis and prices across supermarkets increasing, there could be another reason why shoppers feel the pinch when walking through the aisles at Woolworths and Coles compared with a trip to the low-cost alternative Aldi.

Supermarket giants Coles and Woolworths have made in-aisle music one of the important elements of their branding across the country, even launching their own radio stations to encourage fans to listen to music when they’re not completing their weekly shop.

But Aldi has failed to even turn its speakers on – and it’s saving the company millions every year.

Supermarkets could pay up to $6m per year to have music played through their stores. Picture: NewsWire / Glenn Campbell

In order for a business to play music inside a store or venue, it must obtain a licence that covers the royalties and copyright for musicians across all platforms.

Under Australian copyright law, businesses that fail to pay the music licensing fee could face potential copyright infringement if they play music in public, be it to their staff or customers.

Businesses can purchase a public performance licence from OneMusic, comprised of the Australasian Performing Right Association, Australasian Mechanical Copyright Owners Society and the Phonographic Performance Company of Australia.

Speaking to NewsWire, OneMusic director Catherine Giuliano said about 100,000 businesses and organisations relied on its licensing, which is required if a business plays the radio, CDs or vinyl, streams on digital platforms, or has the TV switched on in the background.

Coles and Woolworths both require licences despite having their own radio stations playing throughout the supermarkets that are curated especially for them and provided by background music suppliers.

Aldi does not play any music in its stores across the country. Picture: NewsWire / Andrew Henshaw

While it doesn’t matter where the company or business sources its music, the cost to obtain a licence fee depends on the floor size of the store or venue.

“Licence fees range from $97.72 a year in a small space with a radio playing to $6045.06 a year for a large space where a digital music streaming service is being used to play music,” Ms Giuliano said.

For Woolworths and Coles, the maximum they would pay for an annual music licence is upwards of $6m, though Ms Giuliano said not all supermarkets would be subjected to this figure depending on the floor size.

“Essentially larger footprint stores pay more, smaller stores pay less,” she added.

“This is what the sector agreed to during our consultations on fee structure.”

Businesses that play music in public spaces are required to pay an annual licence fee. Picture: NewsWire / Gaye Gerard

Ms Giuliano said businesses such as Coles or Woolworths obtaining a music licence was a valuable tool to encourage more shoppers, even if it cost them $6m per year.

“Business owners and managers obviously see a value in music playing on-site,” she said.

“That value is directly from the creative efforts of copyright owners.

“These music creators have a legal right to give permission for their work to be used in exchange for a fee. That’s the basis of a music licence.

“Through OneMusic, these fees are returned to the music creators as royalties.”

However, Aldi is one supermarket that hasn’t included music in its retail strategy, with an Aldi spokesperson telling NewsWire that “music is not currently available in any of Aldi’s Australian stores”.

“You won’t hear music playing in our stores, but we hope our customers are singing praises about the savings,” they said.

“We’ve always said we do things a little differently – Good Different. By skipping extras like in-store music, we keep things simple and pass those savings straight to our customers. It’s all about making shopping easy, efficient, and affordable.”

Ms Giuliano would “love to see” Aldi add music to its aisles in the future.

“Like many Australians, we would love to have music playing throughout the almost 600-strong Aldi network,” she told Yahoo Finance.

“The atmosphere created by music that makes customers return to a business, recommend to their friends and buy more is many multiples of the cost of a OneMusic licence.”

As for Aldi, the spokesperson confirmed the low-cost supermarket was not planning to change its music-free ways however did not confirm whether it was a cost-saving measure.

“There are no plans at this time to bring music to Aldi stores,” they told NewsWire.

Shoppers are more likely to spend more in a store that plays music. Picture: NewsWire

Worldwide studies suggest playing music could influence purchase decisions and determine how long someone spends inside a store.

According to a Sounds Like Branding study, 14 per cent of people admit they buy more when music is playing in a store, and 62 per cent say they are more likely to stay inside a store that plays “good music”.

A recently released study from Gema Group and Audoo found that music could cause an 8 per cent spending boost for retailers, though research from the University of Bath suggested “pleasant music” was less likely to encourage shoppers on weekends, as they’re “essentially happier”.

“Pleasant music appears to have a mentally soothing effect which impacts the way people shop,” University of Bath researcher Carl-Philip Ahlbom explained.

“At the weekend people are essentially happier, and so the positive power of music is less noticeable.

“In fact, playing music at the weekend may even mean people buy less, possibly because it’s an additional stressor in an already busy environment.”

Originally published as Surprising reason why you spend more at Coles and Woolies