Intelligent Investor

Tell us your supermarket experiences

There are big changes underway at your local supermarket. Supermarkets analyst James Greenhalgh wants to know what you think.
By · 20 Apr 2012
By ·
20 Apr 2012
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My most recent supermarket shop—at a new format Coles on Easter Saturday—cost $434. Ouch. The cost of our monthly shop has been creeping up, and seemed to be around $300 only a year ago. Something's changed, and it can't be the dog we adopted in January. He doesn't eat much.

I'm not sure we're spending more overall, although it feels like it. If prices are 'down, down', I haven't noticed it. But what we're definitely doing is spending more at the Wesfarmers-owned Coles than before.

Some of that's due to changes in our meat-buying habits. We buy organic/free range meat, for reasons I won't go into lest I get called all sorts of names. Previously we couldn't get decent organic meat at Coles, but its selection has improved markedly. We can now do our monthly shop in the one supermarket.

That's important to me. I realise I could probably pay less overall by visiting Aldi or markets as well. But I don't have time to muck about with multiple supermarkets. I prefer to ferret out bargains on the sharemarket instead.

The new fresh food people?

So I'm pleased that Coles has lifted its game. Its new format supermarkets in particular are much more pleasant places to shop, and the fresh food section is really a cut above. I'm fairly confident that this improved shopping experience is behind the company's better same-store sale growth. If I'm spending 40% more at Coles, then perhaps other people are as well.

Coles are doing smart things to attract customers too. Coles now send us vouchers that provide $10 off our shop (woohoo – a 2.3% discount on the most recent spend), and 20 cents a litre off petrol when you spend over $200. These little things help to cement customer loyalty.

Today's announcement of the revamp of the FlyBuys program will make a difference too. It's a big change from the follow-the-leader marketing approach Coles had under previous management.

It's important not to extrapolate one's own experiences too much. So, as Intelligent Investor's supermarket company analyst, I'd also like your feedback. There's only so much one person can notice.

What has been your experience of Coles, Woolworths and the other supermarkets over the past two years? Is there anything you've noticed? Have you changed your grocery shopping habits? And are you spending more or less than before?

With your help, I hope to form a picture of what Coles, Woolworths and IGA are doing right—and and wrong.

Disclosure: The author, James Greenhalgh, owns shares in Metcash (which supplies IGA).

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.
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