Australia’s grocery war shifts to home brands as Coles cuts price of 145 items up to 25%

Coles has fired the first shot in its ongoing price war with Woolworths. The arena this time is home brands with Coles cutting by up to 25 percent prices on 145 everyday Coles Brand products.

The discounted items on the list include A4 copy paper, pasta sauce, shredded cheese, sandwich bags, sunscreen and mud cake. The 145 items bring to almost 1,000 products on Coles’ Every Day low pricing model in which the price cuts are locked in for at least six months.

Coles Managing Director John Durkan says placing about 1,000 Coles brand products on its Every Day pricing is the biggest price promise. He explains, “Our Every Day prices give customers value they can trust every time they shop with us and means they don’t have to wait for a special to buy at a great price,” quotes News.com.au.

With the price cuts, its products become more affordable which give shoppers real savings at the checkout. The discounts are part of Coles’ continuous investment as it works alongside with Australian suppliers to give buyers products with great value and taste too.

Consumer would likely appreciate the lower prices especially since several low-profile grocery lines hiked their prices by over 10 percent, Citigroup noted a few weeks ago. But for Baillieu Holst analyst Mathan Somasundaram, the move by Coles is the supermarket giant’s way of bringing attention to the grocer’s private label which are the next battleground in the supermarket wars.

He sees Coles’ move as a pre-emptive strike to squeeze Woolworths which is still in the transition phase with its private label product. Woolworths said it would cut its Select home brand in June, three months after it did the same thing to its Homebrand range.

The Sydney Morning Herald reports that Woolworths would consolidate its private label range under a Woolworths label. The move aims to boost the supermarket chain’s food and liquor sales by 4 percent and volume growth by 2 percent.

Commenting on Coles’ initiative, Somasundaram says, “I think it’s a very smart move, Coles is telling Woolworths that if it wants to go to war, it’s going to have to bring a bigger war chest.”

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