Woolworths says price cuts to 3,500 products is “just the beginning”
Australia’s largest grocery chain has informed the market that they have reduced the shelf price of 3,500 products Australia-wide.
The “long term shelf price reduction strategy” has been made possible due to “business efficiencies”, the company said.
“3,500 everyday grocery products have had their standard shelf price reduced over the last few months and are now cheaper than they were a year ago,” Woolworths said in a statement. “These lower prices are in addition to the standard 2,000 weekly specials which will of course remain a key part of the Woolworths offer. And this is just the beginning… with thousands more price cuts to come.”
Woolworths Director of Supermarkets Greg Foran said their ability to reduce costs in their supply chain meant they were well placed to reduce prices.
“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,” he suggested. “We are putting those efficiency gains to good use by rewarding our customers with meaningful savings.”
The announcement comes hot-on-the-heels of Coles’ move to implement national pricing – whereby the price of 97% of their products will be the same Australia-wide. And it is a sign that competition is beginning to heat up in a week in which Woolworths failed to meet analyst expectations with their second quarter sales figures.
Competition expert Frank Zumbo, of the University of New South Wales, said the news was welcome but needed to be more specific.
“With Coles earlier this week also quoting big numbers in their pricing announcement, it’s clear that the sparring in recent days between Coles and Woolworths on how big a number of products they can quote in their media releases has a “me too” flavour and misses the point of what consumers really want,” he argued. “Consumers want to see a full list of products affected by the announcements this week and they want to know exactly how the price of each product will change.
“Consumers also need to know that the Federal Government is keeping Coles and Woolworths honest. Statements by Coles and Woolworths that they will “do the right thing” and have a single national price for some of their products need to be legally enforceable under our competition laws.
“A private members Bill sponsored by Senators Nick Xenophon and Barnaby Joyce and currently before Federal Parliament named the Blacktown Amendment would, if enacted, provide consumers with a legal guarantee that Coles and Woolworths are in fact always selling a product at the single lowest price in each of their supermarkets in same geographic area.”
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