Woolworths Has “Less To Lose” In Potential Supermarket Price War
The past three trading days have seen more than $8 billion wiped off the market value of food and grocery retailers, and it’s sparking fears of a UK-style price war.
Analysts and investors are biting their fingernails and nervously awaiting an aggressive response from Coles, Metcash and Aldi after Woolworths accelerated its investment into grocery prices.
Woolies has the highest food and liquor margins in the world, but they’re expected to fall from 7.9 per cent to as low as 5.5 per cent this year, as the supermarket giant funnels more than $600 million into reducing grocery prices and upping service in stores.
According to Fairfax, Deutsche Bank analyst Michael Simotas said, “The deep earnings reset raises the prospect of a price war, given that Woolworths has less to lose.”
But the supermarket’s outgoing chief executive Grant O’Brien has downplayed the risk of a price war, saying the Aussie grocery landscape has traditionally kept things balanced.
Woolworths has indicated it “will not be beaten on price” and is not planning to go to great lengths to undercut rival Coles, because price isn’t the only thing shoppers look for in a supermarket.
“The way Woolworths has presented it, they’ve realised their prices need to be competitive but they’re not going out of their way to distance themselves a lot from Coles,” Nikko Asset Management fund manager Craig Young told Fairfax.
But analysts say Coles won’t let Woolworths out of its sights, and it won’t be relinquishing its price leadership any time soon.
Following Woolworth’s lead, Coles has doubled its investment in price to around $400 million annually, but may have to spend even more to protect its price leadership and re-establish the previous price gap.
“If an aggressive price war does erupt, we expect independents will be the biggest losers given the relatively thin margin which is shared between the retailers and Metcash,” Simotas added.
Please login with linkedin to comment
brisbane city council Jamie Oliver performance review State of Origin Thinktank Social UM MelbourneLatest News
DOUBLESTAR CO Turns Technology Stunning With New Brand Livery For Australia’s Own Advanced Navigation
To keep pace with their transformative technology, Advanced Navigation turned to DOUBLESTAR CO for art direction, 3D modelling and design help that would capture the value proposition and offering of Advanced Navigation: AIR, LAND, SEA & SUB-SEA for their upcoming campaign “Accurate positioning in the most demanding conditions”. Advanced Navigation’s Head of Marketing Romain Pare […]
Nine Announces First Hires For Powered Enterprise
Nine has announced the appointment of Nicki Kenyon and Michele O’Neill as the first leadership hires for its newly launched Powered Enterprise division. Kenyon has held executive leadership roles in global corporations and start-ups in Australia and Asia Pacific, most recently as General Manager of Marketing for leading industry travel body Visit Victoria and prior […]
Tom Pitney Promoted To Strategy Director At Junkee Studio
Junkee Studio, oOh!media’s creative and social agency division, is capitalising on another successful year by announcing the promotion of Tom Pitney to Strategy Director. Pitney will now drive the direction of Junkee’s in-house creative and strategy team, which produces bespoke content solutions for brands to help them tell and share their stories across their owned […]
SMI Data: Footy Grand Finals See Ad Spends Soar For October, As COVID Fears Subside
Australia’s media agency market is finally emerging from the COVID crisis, with the latest SMI data showing the market back just 4.8 per cent in October and the forward bookings detail confirming November and December ad demand is well above where it was at the same time last year. The October market was boosted by […]
Norwegian Cruise Line Revives Queen’s ‘I Want To Break Free’ In New Global Campaign
Norwegian Cruise Line has launched its new global brand campaign, “Break Free,” encouraging travellers to look beyond the confines of 2020 and towards a future when they can reconnect with the people and places they have missed most. Encouraging travellers to revive their destination dreams and make them holiday realities, the campaign which is a […]
Cricket Australia Boss Slams Seven For Talking “Our Wonderful Game Down”
Cricket Australia’s (CA) interim CEO Nick Hockley (main photo) has slammed broadcaster Seven for talking “our wonderful game down”. In a blistering attack on its broadcast partner, Cricket Australia lashed Seven for its ongoing legal stoush as it attempted to exit its four-year deal with the sport. As reported on B&T today, Seven West Media […]
TAC’s Christmas Campaign Via TABOO Urges Victorians To ‘Spend It Wisely’
Road safety meets a time-honoured Christmas tradition with the launch today of the Transport Accident Commission’s ‘Spend it Wisely’ advent calendar initiative, developed in close partnership with Melbourne-based creative agency TABOO. The digital advent calendar provides 25 days of road safety tips, plus offers and discounts to businesses throughout the holiday season, to help Victorians […]
PepsiCo ANZ Appoints New CMO For Snacks & Beverages
PepsiCo Australia and New Zealand has announced the appointment of Vandita Pandey to the newly created role of Chief Marketing Officer for both snacks and beverages. Pandey comes from Frito-Lay (a PepsiCo company) in the United States where she has spent the last 11 years in roles that span across marketing, corporate strategy, insights and […]
Aussie Music Stars Front New Digital Campaign For Destination NSW
A bunch of well-known Aussie musicians have been called upon to feature in a new digital marketing campaign by Destination NSW geared at convincing Australian travellers to take a road trip in the state. Informed by audience insights captured through consumer travel websites Sydney.com and VisitNSW.com, the ‘Road Trips’ campaign uses the top searched items, […]
Why DDB Sydney Is Supporting Advertising Equality Initiative ‘ShEqual’
In this guest post, DDB Sydney MD Priya Patel (pictured) discusses why DDB is supporting the launch fo shEqual, an advertising equality initiative from Women’s Health Victoria… shEqual, which launched last week, encourages advertisers and agencies to seriously consider the work we produce and how, collectively, we can move away from tired stereotypes and sexualised […]
Minister Asks ABC Chair To Explain Public Interest Of ‘Inside The Canberra Bubble’ Four Corners Episode
Thought the kerfuffle over Liberal MPs bonking their staff had gone away? The gasoline is only now hitting the match.
Popular With The Brits But A Flop With Locals, Foster’s Vies For Australian Comeback
Australia's most hated beer, Foster's, set for a comeback. Well, apart from XXXX Summer and Heineken Zero that is.
Seven Seeks Internal Emails As Contract Spat With Cricket Australia Escalates
The only winners of these contractual spats are only ever the lawyers. And possibly the lawyers' local BMW dealership.
Subaru Celebrates The Road Less Travelled In New Creative Campaign
Subaru urges Aussies to take a road trip in new campaign. Although car sickness & haemorrhoids sufferers are exempt.
MG Motor Australia Calls On Country To Take A Test Drive To Make A Difference This December
The British marque's now Chinese owned & made. Although probably doesn't want that mentioned given the current climate.
First Day Of Summer Coined ‘Zooper Dooper Day’
Take any Zooper Dooper to zooper new levels by blending one with two shots of vodka, two shots of tequila.
Twitter Says It Won’t Ban Viral Chinese Tweet Of Photoshopped Australian Soldier
As Australia-China relations worsen, Xi Jinping announces pavlova now off the menu at the Great Hall Of The People.
Sudanese-Australian Model Kisses Wife In Anti-Homophobia Stance In Powerful Elle Cover
Lots of people like to say that print is dead. But as you'll read here, a little arthritis aside, it's alive & kicking.
CommBank’s Dollarmites To Be Axed From Victorian Schools
In bad news for seven-year-old TikTok and YouTube millionaires, CommBank’s Dollarmites set to be scrapped.
Daily Telegraph Takes Down Hugh Marks Article Following Legal Threat
Tele backs down in legal stoush with Hugh Marks. Miranda Devine heard to comment: "Thank f@ck I didn't write it."
IKEA Says 50% Of Meals On Restaurant Menus Will Be Vegan By 2025
IKEA warning of a sharp increase in customer flatulence as in-store restaurants go plant-based.
Adgile Doubles-Down On Australia Growth With Team Expansion
Following on from the appointment of Paul Evans as its first Global CEO, Adgile Media has set about expanding and developing its talent base, in order to support and drive growth within the Australian market. Stu Carr joins as Adgile’s new Director of Customer Insights, where he will support clients with their data and analytics […]
WARC Study: COVID Slashes Global Ad Spends By 10.2%, Recovery To Take Two Years
It's yet ANOTHER study showing the impact of COVID on ad spends. Scream "we know, we know" as you digest the facts here.
“It’s A Hoff-Alanche!” David Hasselhoff Plays Nine Roles In Totally Bonkers Ad For Internet TV Service
With the US scratching about for a decent president, any David Hasselhoff ad suggests the answer's closer than we think.
Amaysim Builds On Success Of Little Sim, Big Love Rebrand With Love Machine Music Video Via 72andSunny Sydney
Amaysim has debuted the official music video for the song at the centre of their new campaign, Love Machine, performed by former Gang of Youths lead guitarist, Joji Malani. The music video, produced by creative agency, 72andSunny, builds on the success of amaysim’s recently launched Little Sim, Big Love brand platform and tells a tongue in cheek […]
Val Morgan Digital & Fandom Team Up With Adidas For New Campaign Featuring Esports Star
Partners of Val Morgan Digital, Fandom, the largest entertainment fan site in the world, have this month teamed up with mega brand, adidas to build hype around the release of their new X9000 range. The multi-faceted campaign included a mix of written & video content that tapped into the core pillars of style, tech, and […]
Lucky Cat Takes Nut-Fuelled Voyage Of Self-Discovery In Lucky Nuts Campaign Via Saatchi & Saatchi
Nuts are such a healthy, on-the-go snack, aren't they? B&T often enjoys the salted variety with six schooners.
Akcelo Expands Data Strategy And Martech Capabilities With Appointment Of Senior Marketer Anne Ngo
Brand experience and innovation company Akcelo has today announced the latest senior addition to its growing team, appointing highly experienced marketer Anne Ngo as martech and customer strategy director to lead and grow the practice. Ngo will help Akcelo clients grow their customer marketing and martech maturity by leveraging her deep understanding of the challenges […]
Lifting The Lid On Data: Are Data Labels The Answer?
Many are calling data the chief tenant of the Fourth Industrial Revolution. Drunk people seem rather fond of saying it.
7-Eleven Partners With Adobe And Microsoft To Accelerate Digital Strategy
7-Eleven has entered strategic partnerships with Adobe and Microsoft in what is set to accelerate the company’s ambitious digital strategy. With transformation works well underway, 7-Eleven’s digital plans signal a significant step forward for Australia’s leading convenience retailer. 7-Eleven General Manager of Strategy and Technology Stephen Eyears (pictured) said the company sought to deliver more agile innovation in order to meet customer needs across […]
