Petrol discount will go on: Coles

Jane Harper
March 03, 2013
Herald Sun

SUPERMARKET giant Coles has brushed aside criticism of its controversial 8c-a-litre petrol discount vouchers and signalled it may extend the deal.

And the grocer’s owner, retail goliath Wesfarmers, has taken aim at food suppliers for failing to cut costs by investing in their businesses.

In a move likely to inflame tensions with the competition watchdog, Wesfarmers chief Richard Goyder will not rule out extending the 8c offer when it ends next month, or reprising it later.

Speaking exclusively to the Herald Sun, he said the discount provided a “significant benefit” to shoppers.

Coles launched the offer last October, vowing to run the promotion until Easter, and rival Woolworths matched the deal.

The Australian Competition and Consumer Commission has launched an investigation amid fears the discounting push will kill off independent petrol stations, leaving Coles and Woolworths even more dominant in the market.

Australian shoppers spend more with Wesfarmers’ retail chains – which include Bunnings, Kmart, Target and Officeworks – than any other retailer.

The 8c discount is double the usual discount voucher given to shoppers who spend at least $30 at Coles or Woolworths in one transaction. They have previously offered 8c discounts, but only for brief stints.

Mr Goyder said the offer was like any other Coles promotion. The retailer has become known for its aggressive price cuts over the past three years.

“From time to time, the discount offer goes up, and at the moment with fuel prices where they are, it’s a significant benefit to customers,” he said.

“There have been a lot of inquiries in the past on fuel prices and our view has always been that this is advantageous to shoppers.”

ACCC chairman Rod Sims said there were concerns about the impact on competition when the retail giants used profit from their supermarket chains to offer cut-price deals in other markets such as petrol.

Mr Goyder said it was not fair to point the finger of blame only at the two biggest players when other service stations had similar deals.

“We will co-operate with the ACCC on this investigation and deal with any matters that come out of it, but the reason we are doing it is because it’s a benefit to people who come and shop with us,” he said.

He also took aim at suppliers, who have criticised Coles and Woolworths for putting the squeeze on farmers and other food producers during their fierce price war.

Mr Goyder said many suppliers had failed to build their businesses during prosperous times.

“A lot of suppliers haven’t invested the money in innovation and productivity that they maybe should have, which would provide better returns at their level as well.”