Commerce blog 5
Coles and Woolworth’s price war coming to an end?
http://www.abc.net.au/news/2018-03-07/why-supermarkets-are-moving-away-from-price/9524110 – viewed 15 of march
The Australian supermarket price war started in around 2011 as a major supermarket Coles started making their prices low so people would by their products. The other supermarkets such as Woolworths started firing back and the prices kept getting increasingly cheaper which started the 7 yearlong price war. There were other companies who were involved in the price war but Coles and Woolworths were the main two competitors. The supermarkets started making promotions mottos and campaigns such as “down down” (coles) and “cheap cheap” (Woolworths) Coles and Woolworths are very similar brands they offer similar brands, weekly specials and online services so they had to compete to be different by making their prices the lowest out of the two. The price drops are getting ridiculously low but is it really working for the companies. It is good for the customers because their food keeps getting cheaper and more affordable. The supermarkets are losing profit because of this price war their prices are getting cheaper but their rent is not.
The great Australian supermarket price war may be coming to an end as companies are deciding to focus on things other than price. The price war has been going on for seven years and is losing money for the companies. As a customer, the price war is great because all your favourite groceries just keep getting more affordable. Coles is hoping to increase profit by stepping out of the price war because they still have to pay the same amount for their rent and other necessities regardless of how cheap their grocery prices are. Coles has said they are becoming independent. Rather than price Coles has decided to focus on service quality, social programs and connecting with the community. Both companies have started campaigns including athletes and the connection between their success and the companies’ foods. Woolworths has started the campaign of “Australia’s fresh food people” and Coles’ sports for schools campaign is an example of these. The moving away from price competition is hoping to increase profit and customer loyalty.
The price war between major Australian supermarket companies such as Coles and Woolworths may be coming to an end because of the companies deciding to move away from price campaigning. Although the price war may be coming to an end their competitiveness and war for customers will not.