Coles Express joins milk price battle
The company is now offering $1-a-litre milk through more than 600 Coles Express outlets Australia-wide in what is seen as a direct attack on the traditional corner shop - a sector already suffering in the crossfire of the supermarket giants' food price war.
Coles has not added its $1 bread to its convenience store offering but did cut the price of its Coles brand bread from $2.49 to $2.30.
According to a recent report from industry research firm Ibis, consolidation is inevitable in the same way that Coles and Woolworths have cornered the supermarket sector.
The president of the Queensland Dairyfarmer's Organisation called for consumers to boycott the cheap Coles Express milk and support their local independent corner stores, which are being squeezed out of business.
Coles corporate affairs chief Jon Church denied the price cuts would put pressure on independent convenience stores, saying "the volume of milk and bread sold at Coles Express is very small compared to Coles supermarkets and will not make a material difference to other convenience stores".
"We have aligned prices with supermarkets because customers told us they did not understand why they should pay more for the same product at Coles Express. We thought they had a point and so we now offer the same price for these products whether bought at our convenience stores or supermarkets," he said.
Frequently Asked Questions about this Article…
Coles started offering milk for $1 a litre at more than 600 Coles Express outlets Australia-wide, positioning the move as part of its convenience-store pricing changes.
The article says the $1-a-litre milk is available through more than 600 Coles Express outlets across Australia.
No. Coles did not add a $1 bread offering to Coles Express. It did, however, reduce the price of its Coles-brand bread in general from $2.49 to $2.30.
According to the article, Woolworths is not the target this time. The price cuts at Coles Express are described as a direct attack on traditional corner shops and independent convenience stores.
The president of the Queensland Dairyfarmer's Organisation urged consumers to boycott the cheap Coles Express milk and support local independent corner stores, saying independents are being squeezed by the supermarket price war.
Coles corporate affairs chief Jon Church said the volume of milk and bread sold at Coles Express is very small compared to Coles supermarkets and ‘will not make a material difference to other convenience stores.’ He added the company aligned prices because customers told them they didn’t understand paying more for the same product at Coles Express.
The article cites an Ibis report saying consolidation in the convenience-store sector is inevitable, similar to how Coles and Woolworths have come to dominate the supermarket sector.
Everyday investors may want to watch how the market and consumers react to the price alignment, any follow-up moves by competitors, signs of consolidation among independents as highlighted by the Ibis report, and public responses from industry groups such as the Queensland Dairyfarmer's Organisation. These trends could affect competitive dynamics in grocery and convenience retailing.
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