Woolworths ‘plays its own game’ by launching price cut campaign
The price wars between Australia’s major supermarkets are heating up as Woolworths launches a price cut campaign tomorrow, which the retailers says will save families almost $400 a year.
In the wake of Coles’ ‘down down’ price cut campaign which added Milo and Vegemite products to its list of price reduced items earlier this month, Woolworths has announced it will slash the prices on hundreds of products by up to a third.
However a spokeswoman for Woolworths said the campaign is not in response to Coles’ ‘down, down prices are down’ campaign.
“We play our own game,”, a Woolworths spokesperson told Mumbrella.
I wonder where the saving comes from…
I’m sure it’s a complex deal between suppliers/distributors/woolworths etc.
I am also happy to hear they ‘play their own game’, my question is “Will they pay their own song?”
Everyday Value – to the tune of..?
Will be interesting to see how WWS spruik the customer benefit, without sounding like they’re following.
I am sure someone is losing out (producer) or the price difference is added somewhere else. I bet they hope that consumers spend it on something else while we are in store ‘saving money’. Nice try, but I am sure the profits will show that Wollies only helps themselves.
Chris we know where the “savings” come from. Here’s an example where we won’t mention brand names:
Coles has in the recent past added their own money to match or exceed a supplier rebate, e.g. BrandA is asked to rebate Coles $1 and Coles tips in $1.50 of shareholder funds. Promotional saving to customer Jane Doe is $2.50. Coles invests in ads to tell Jane Doe prices are down down at Coles. BrandA increases sales volume so deal makes biz sense.
BrabndA is summonsed by Woolworths buyer and told to match Coles price. i.e. Rebate Woolworths $2.50. BrandA points out they would lose money on every sale and is told match it or someone else will.
Woolworths continue to cliff suppliers while publicly declaring they are delivering everyday low prices. BrandA has little left over to innovate or advertise so the category stagnates. Woolworths substitutes sku with inferior BrandB or Woolworth’s Select.
Customer Jane Do goes to Aldi where the margins are so tight BrandA is cheaper again. Yet everybody is a winner. BrandA makes a fair margin as does Aldi and Jane Doe finds her shopping trolley costs $77 as opposed to $134 at Coles and $134.50 at Woolworths. (or there about according to research undertaken by Choice.)
Meanwhile Coles starts to improve customer service to a level that Woolworths price gouge isn’t enough to appeal to Jane Doe anyway. And the friends and relatives of Jane Doe and Woolworths employees lose their jobs at the SPC cannery, Dairy Farmers co-op and local cereal factory. Jane Doe sends food parcel from Aldi to Smith Family appeal to help fellow struggling Australians.
Cut to smiling “real people” in Woolies feel good ad reminding us they are proudly on our side.
Future prediction: Challenger BrandC reinvents the category, cuts out the retailer and delivers product direct to Jane Doe. Super Funds sell Wesfarmers and Woolworths shares and we all retire.
Woolworths – The Copycat People.
What washed up band or performer will Woolies drag up to try and out do Coles with Status Quo?
I’d just be happy to have a CLEAN local store, where the shelves are free of passed-used-by-date items.
Sad thing is – the now ex-marketing director of Woolies – got rid of M&C [no offence D5] who were constantly trying to get Woolies to beat Coles on value. There can be nothing more annoying for any agency than to lose an account, only then for client to start running the very work they criticised the former agency for presenting.
Quote of the year:
“Jane Doe sends food parcel from Aldi to Smith Family appeal to help fellow struggling Australians.”
The duopoly is bad for Australia. No two ways around it.