Following Coles’ announcement that it is implementing a national price policy, Woolworths announced it’s reducing the shelf price of thousands of supermarket products.
With 12,000 products already priced identically regardless of where you shop, 3500 everyday grocery products have had their standard shelf price reduced over the past few months and are now cheaper than they were a year ago, said Woolworths director of supermarkets Greg Foran.
“At the end of the day, customers simply want the lowest possible price from their supermarket and Woolworths will absolutely deliver it,” he said.
“The reason we can do this is because we’ve spent a decade driving costs out of our business and becoming as efficient as we can.”
As both Coles and Woolworths have taken steps to reduce prices and improve price transparency, Competition and Consumer Affairs Minister Craig Emerson said the Rudd Government has been working hard to boost competition and tear down the barriers stopping supermarket rivals.
“The Rudd Government’s attitude is competition between supermarkets is good for both consumers and food producers, and more competition is better.”
Coles and Woolworths are facing increasing competition from Aldi which now has more than 200 stores in Australia with plans to increase its presence to 700 stores, and Costco has opened a massive store in Melbourne and is planning to open one in Sydney as well.
The government’s pro-competitive reforms include relaxation of foreign investment rules for overseas-owned supermarkets; the removal of restrictive clauses in tenancy agreements between major supermarket chains and shopping centre owners that inhibited the entry of rivals, and the introduction of compulsory unit pricing in large supermarkets to empower consumers to identify the supermarket items representing the best value for money.
“The grocery price wars are good for consumers and the government will not relent in introducing more competition into grocery retailing,” said Emerson.