Price war between Australian supermarket chains Coles, Woolworths intensifies amid government pressure to discount groceries and not fuel, with both retailers offering discounts of more than half off in effort to lure shoppers

Cindy Allen

MELBOURNE, Australia , August 13, 2013 (Herald Sun) – UNDER intensifying pressure from the Australian Competition and Consumer Commission to pull back on petrol shopper dockets, Woolworths and Coles are exploring a new way to lure in each other's customers -- massive discounting.

Today Woolworths will launch ``Big Family Specials'' with a 64 per cent reduction on dishwasher tablets and 50 per cent off bacon.

A fortnight ago, Coles kicked off a program called ``Unreal Deals'' by halving the price of slabs of Coca-Cola cans and copier paper.

Both are expected to offer huge short-term savings on pricier items for the foreseeable future in a bid to snare shoppers from each other.

Coles spokeswoman Anna Kelly said: ``These (Unreal Deals) are something that customers would cross the street for.''

Woolworths spokeswoman Kristen Young said it had not offered discounts of this size in living memory.

The chains say price is the new battleground in the supermarket wars.

Internal Woolworths research shows it has become the single most important driver of ``store choice'', with families feeling that stress on their household budgets is mounting.

``Our customers are increasingly concerned about the rising cost of living,'' Ms Young said.

Seventy-two per cent of Woolies' shoppers express this worry -- a greater proportion than two or three years ago, Ms Young said.

Since Woolworths began intensifying discounting in May through its ``Every Day Value'' program, it says customers have saved $80 million -- or about one per cent of trade in that time.

The decisions by Coles and Woolworths to chase customers using deeper discounting have come after the ACCC stepped up its call for them to lay off shopper-docket fuel discounts.

Late last month ACCC chairman Rod Sims said: ``If Coles and Woolworths wish to offer customers a discount, it should be off supermarket products, not petrol.''

Mr Sims is of the view that while shopper dockets worth up to 45c/L provide short-term benefits to some consumers, the likely harm to other fuel retailers and therefore to competition ``could well be substantial''.

The ACCC is nearing the end of an extensive investigation into the impact of shopper dockets. Mr Sims has indicated the regulator will launch legal action unless the chains ease up on receipt-based petrol deals.

HOW LOW CAN THEY GO

Woolworthys

Finish dishwasher tablets were $27.99 NOW $10

Shortcut bacon rashers were $15.98kg NOW $8kg

Coles

Huggies Jumbo nappies were $33 NOW $28

Red Bull (4 x 250ml cans) were $9.60 NOW $4.84
(c) 2013 News Limited

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