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.
Woolworths said the campaign was prompted by customer feedback that showed finding savings in the family budget is more important now than ever as there are rising concerns about the high cost of living.
Woolworths managing director Tjeerd Jegen said there will be between 40 and 50 ‘Every Day Value’ price cuts in every aisle on average, including products MSA Australian beef steaks, deli ham, Tip Top bread, Western Star Butter, Arnott’s multipacks, and International Roast Coffee.
Although there has been some above the line marketing spend, Woolworths said the campaign will run mostly in-stores from tomorrow for at least six months.
The campaign has also received media coverage on Radio 2GB and on Channel Nine.
“It’s our job to make life easier for our customers, every day, by making sure they are saving on the essential items that they buy most often,” Jegen said in a press release.
“We have taken a single-minded focus to delivering savings to our customers, lowering the price of literally hundreds of our most popular products across the store.”
Customers will find between 40 and 50 ‘Every Day Value’ price cuts in every aisle on average, he said.
“While we know that Woolworths is consistently cheaper than Coles on a comparable basket across the store, we are constantly looking for new ways to offer our customers ways to save.
“Looking at an average basket, Every Day Value price cuts could save Australian families more than $200 between now and Christmas, and almost $400 in a year on some of the most popular products on their shopping lists.
“The hundreds of Every Day Value price cuts that we are launching are just the beginning of our commitment to delivering more savings every day on essential family items. These prices will stay down for at least six months, and we have even more great savings in store for our customers – every day.”
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..?
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Will be interesting to see how WWS spruik the customer benefit, without sounding like they’re following.
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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.
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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.
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Woolworths – The Copycat People.
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What washed up band or performer will Woolies drag up to try and out do Coles with Status Quo?
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I’d just be happy to have a CLEAN local store, where the shelves are free of passed-used-by-date items.
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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.
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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.
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