Two years after Coles declared war on Woolworths by slashing milk prices to $1 a litre, a new battle is raging between the supermarket giants that may spell the end of the suburban corner shop.
Yesterday marked the second anniversary of the commencement of the “milk wars” between the two multinational chains and since then the battle lines have been continually redrawn to include bread, liquor and fresh produce.
Earlier this month, a new front was opened — Coles announced it would offer its $1 per litre milk and discounted bread at its more than 600 Coles-Express petrol stations nation-wide. Days later, Woolworths followed suit at the 475 stations it operates with Caltex.
Bob Cybula, retail chairman at the State IGA board, said this latest move could mean the death of the traditional corner store.
He called on the Federal and State governments to launch a review into the “predatory” actions of supermarket chains.
“Small businesses find it almost impossible to compete on a level playing field when the big national grocery chains behave like predators,” he said.
“If a small business loses money it goes under, if a store in a large national chain loses money it is amortised over the group with the hope it will improve over time as their duopoly grows.
“If this attack on local business continues, many will be forced to close their doors, spelling an end to competition in suburbs and towns across WA.”
A spokesman for Coles said the company was merely responding to consumer demands to align the price of its own brand milk in stores and service stations.
“We have aligned the price of our Coles brand milk at Coles Express to match the price in our supermarkets, because customers told us they did not understand why they should pay more for the same product,” he said.
Tom Di Chiera and his wife Silvana own and operate Di Chiera Bros in North Perth, a family business started in 1957. The shop continental store and delicatessen is located between a Coles supermarket and a Coles Express service station.
Mr Dr Chiera said each move by the supermarket chains has had a significant impact on the store, but the family were able to adapt and survive.
“My father ran the store when Coles was opened in 1976 and immediately our profits fell by 70 per cent,” he said. “Since then, we have felt the impact of every price slash and policy — we rarely sell sliced bread and milk now and our fresh produce section has been reduced.
“It is not all doom and gloom though, we don’t give up.”
“We’ve adapted to cater to a more discerning market and offer a level of customer service you wouldn’t get at a supermarket. But we need the community backing to stay open.”
Mr Di Chiera said stores like his were a “dying breed” and would cease to exist without community support.
“We need to community to recognise that we’re passionate and love our business but we won’t be here forever if they don’t support us,” he said.