Woolworths escalates supermarket price war

Blair Speedy
The Australian
May 15, 2012

SUPERMARKET giant Woolworths has returned fire in the latest battle with archrival Coles, offering discounts of up to 20 per cent on groceries for members of its Everyday Rewards scheme.

Under the Extra Special Extra Simple Savings program, holders of Woolies’ loyalty cards can purchase more than 1000 products at discounts of at least 20 per cent, with some prices cut more than 40 per cent.

The move comes less than two weeks after Coles announced a major overhaul of its Flybuys loyalty card scheme, including a 10 per cent discount off five items specified by the shopper from a list of more than 5000 products.

In addition to offering double the discount of the Coles scheme, dubbed my5, the Woolies program allows shoppers to purchase at lower prices from across the entire discounted range rather than restricting them to five items selected via the company’s website.

The loyalty card stoush is the latest front in the pricing war between Woolies and Coles, the latter of whom raised hostilities to new heights last year with the introduction of house brand milk at just $1 per litre, a move quickly matched by Woolies and discount chain Aldi.

Coles also led the field with bread at $1 a loaf, which has also been matched by its major competitors, while both Coles and Woolies have been reporting steady declines in average shelf prices as they each seek to win over shoppers.

Woolworths’ marketing general manager, Elizabeth Ryley, denied her company was following Coles’ lead, saying Woolies’ New Zealand supermarkets division had been operating a similar program for more than 10 years. She said the program represented a “significant investment” but declined to specify how much it would cost the company.