Supermarket wars

Woolies attacks with discounts, Coles hits back with big-box booze

By RJ Whitehead

- Last updated on GMT

Related tags Alcoholic beverage

Woolies attacks with discounts, Coles hits back with big-box booze
Woolworths has broken an apparent ceasefire in Australia’s so-called supermarket wars by launching a fresh salvo at bitter rival Coles in the form of discounts of up to 33%.

On average, customers will find between 40 and 50 Every Day Value price cuts in every single aisle​,” said Tjeerd Jegen, the chain’s managing director, adding that Woolworths research had identified that customers are finding it tougher than ever to meet the cost of essential items.

It has been relatively quiet on both fronts since January, when Coles set out to reduce the price of 100 items as part of its "Down, Down" campaign.

At the time, the Westfarmers-owned chain suggested that with more families looking to tighten their budget through their grocery bill, it was imperative that Coles listen through reductions on milk and bread.

The company’s merchandise director, John Durkan, explained then that the company had invested tens of millions as part of these price cuts, which he said would benefit Australian suppliers through increased orders.

Big-box booze

Meanwhile, Coles has returned the volley by announcing it is trialling a range of new formats for its underperforming liquor business unit. 

It will introduce a warehouse-style model to better compete against big-box market leader Dan Murphy's, which is owned by Woolworths.

Coles’ Liquorland Warehouse in Sydney is two to three times larger than the area liquor shoppers are accustomed to and offers a wider variety of wines, beers and other beverages, the company announced in a statement.

Situated in the south of Sydney, the Liquorland Warehouse will use its larger buying power to offer lower prices to customers.

The warehouse format trial, which began last week, is part of a wider strategy by Coles to improve its liquor operation, which remains behind the pace of rival Woolworths.

Success strategy

This week, Coles released a strategy document that put much of the chain’s resurgence over the last five years down to increased team morale.

The book, running at over 250-pages, highlighted how the supermarket had been decaying until 2007, when Westfarmers began its transformation programme.

So bad was the “management by fear, conflicting agendas and heavy political undercurrent​” that some staff complained it was “hard to convince even my wife to shop at Coles​”.

However, its five-year plan to improve store layouts, premises and morale has succeeded in delivering better customer perception and cheaper prices than Woolworths, the document claimed.

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