New shot fired in supermarket price war
New shot fired in supermarket price war
Supermarket giant Coles has launched what could be the start of a new price war, cutting the cost of items sold at its express stores.
The company today announced its petrol station convenience stores would slash prices on 1000 common items, including milk and bread.
While Coles said it is cutting the prices in response to customer demands, experts say the move is to hurt arch rival Woolworths – but independents are the ones caught in the crossfire.
Independent grocery chain IGA is already suffering via a falling share price, compared with the big players of Coles and Woolworths.
Other independent grocery stores are now worried about the long-term consequences of such vicious discounting.
"We've reached another moment of death by a thousand price cuts for petrol convenience stores," CEO of the Australian Convenience and Petroleum Marketers Association Nic Moulis said.
In the past ten years, nearly 2000 service stations in Australia have gone bust.
Coles and Woolworths see their investment in petrol stations as cheap advertising to get people in their stores where they make their profits.
With discount shopper dockets, both the major retailers lose millions of dollars a year on their petrol stations.
One area they made some money was selling their supermarket groceries at convenience store prices.
Now Coles has begun cutting those and the only winner in the most recent price war is customers.
It is now up to Woolworths as to whether they will fire back and slash prices in their convenience stores.
