You love to see it.
Coles and Woolworths have recently slashed prices on more than 200 products in a sure-fire sign that competition is heating up.
Although that spells bad news for suppliers and supermarket shareholders, it’s great news for your grocery bill, with savings on everything from breakfast to dinner items.
Coles’ Martin Smithson revealed on Wednesday that the chain has lowered prices on 200 products including chicken, bread, coffee and bagels.
Savings range from 50 cents on bagels to $15 for a pack of dishwashing tablets.
It’s all part of a renewed strategy signed off by the supermarket chain earlier this year that has brought back the infamous “Down Down” marketing spiel.
“Since the start of the year we’ve lowered the price of more than 500 products – and we’re not finished yet,” Mr Smithson said in a statement on Wednesday.
“With many Australians looking for ways to save money on regular purchases, we’ve lowered the cost of some of Australia’s most-enjoyed breakfast, lunch and dinner items to deliver even better value to our customers.”
Woolworths wasted little time responding to the heightened competition.
When Coles announced a major round of price drops in April, Woolworths hit back in early June with price reductions across almost 220 products including pork, chicken and soup.
It led to savings of up to $10 on bulk rice bags and coffee.
“The prices dropped represent our commitment to giving customers the most value each time they shop with us, and covers a range of winter essentials, making roasts, warm beverages, bakeware, storage and medicine more affordable,” Woolworths’ Paul Harker said in a statement in June.
Both supermarkets have reduced prices for the winter season, meaning that many of the discounts will last until the end of July at Coles and until the end of August at Woolworths.
For many Australians, it will bring back memories of the so-called supermarket “price wars” in 2011.
Although those days are long over, the latest supermarket moves have stoked hopes that pricing competition is starting to heat up again.
As TND has previously reported, supermarket expert and QUT professor Gary Mortimer doesn’t believe we are about to see another full-blown price war between the major supermarkets, as they worked out last time that too much price competition eats into profitability and creates a downward spiral that’s bad for business in the long run.
As a result, supermarket competition is more likely to show up in changes to the shopping experience and improvements in customer convenience.
This was reflected in Coles’ release on Wednesday, with Mr Smithson saying the chain had expanded its convenience range over winter.
“We are seeing a trend of customers wanting affordable convenience, and we’ve responded to this by doubling our range of ready-to-heat and ready-to-eat meals at Coles,” he said.
Dollar-for-dollar savings might be lower now than during the last price wars, but lower prices are always welcome considering the cost of essentials like food has skyrocketed over the past decade.
And despite the recent price drops, Australians still pay higher grocery prices than people in the UK and Europe, where there is more competition.
Grocery bills can be as much as 26 per cent higher in Sydney than in London (measured in pounds sterling), according to BudgetDirect data.