Coles, Woolworths, Aldi in battle for diminishing shopper dollars

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Just the medicine

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Every time you take something down in price, what you say to your customer is this was too expensive previously and they wait for you to do it again.

Former Woolworths boss Roger Corbett.

Weak growth

No sweet spot

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Cutting themselves

Enormous bill

Last financial year prices were down 1.7 per cent at Coles, 2.2 per cent at Metcash/IGA, and 2.4 per cent at Woolworths.

Banducci himself has defended the investment in lower prices, in light of IRi's report stating that discounts discourage loyalty

"Woolworths is very focused on building trust with our customers," he told Fairfax Media.

"The way we build trust is to put customers first and to do the right thing.

"We aim to have a good balance of promotional and everyday low prices across the store. We're especially working hard to have a good mix across everyday essentials.

He added: "We are on a journey and our customer feedback shows that we're heading in the right direction".

The core problem for both Coles and Woolies is that, while discounting wins over customers in the short term, it's not a sustainable business strategy, and that's troubling news for shareholders, the other big stakeholder in both these brands.

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Productivity push

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Another experienced retailers says that supermarkets will need to find new ways to expand margins "like