Four ways Coles is delivering value for shoppers

Date : 12 April 2021

Nick Miles

Head of Insight - Asia Pacific

We assess four ways in which Coles has stepped up its investment in offering its shoppers enhanced value in recent weeks, why this activity will continue and what we can expect from Woolworths and other retailers in the coming months.

1. Bringing back 'Down Down'

The retailers Down Down everyday low prices campiagn was a key part of the retailer's recovery under Ian McLeod's leadership and Wesfarmers ownership. The long running campaign helped significantly drive down prices and regain shopper's trust in the retailer and its prices, before evolving into its Every Day initiative in recent years. Coles has now decided to bring back Down Down, looking to permanently lower the cost of hundreds of products right across its range. Already up to 250 items have already been included in the new round of price cuts, with more to follow next week and ongoing. Coles Chief Executive Commercial and Express, Greg Davis, commented, “A lot of Australian families are looking to get better value from their weekly budget, and with people still eating more meals at home we want to deliver great prices on the quality food our customers want to eat for breakfast, lunch and dinner.”

Source: IGD Research

2. New big value packs

Coles has launched 40 products in new bulk value packs, including well know brands, condiments, cereals and other every day staple products. The packs are targeted at offering savings for families, with many comparing them to pack varieties available at Costco. Items include a 2kg tub of Bega Peanut Butter, an 18 pack of Maggi noodles, 1.32kg pack of Milo and 8.5kg container of Dollar Sweets 100s and 1000s. The retailer claims that the packs offers savings of up to 75%, they are exclusive to Coles and that they are unlikely to be a permanent addition, as when stock is gone, its gone.

Source: Coles

3. Introduction of limited edition homewares

The retailer has introduced up to 30 new lines across homewares, with all items priced below AU$50. The items that Coles has developed exclusively for its stores with homewares supplier Market Lane, started appearing in 200 stores on 9 April. Products include those not typically found in Coles supermarkets, such as marble tables, cushions, faux plants, photo frames and scented candles. The items will be marketed under the retailer's Best Buys inititaive that officially launched in June last year and has drawn obvious comparisons with Aldi's highly successful Special Buys.

4. Coles Express collectables

With international travel limited, more Australian's will be spending holidays within the country and therefore Coles Express has launched a new collectables sticker campaign called The Great Aussie Road Trip. The booklets, available at Coles Express sites, help educate kids about nature and Australian wildlife. A new sticker will be released each week until 2 May and as kids complete the book it will unlock free products and in-store discounts for Mum and Dad. Weekly associated offers will include free coffee, banana bread and discounts on fuel. Collectables have been used successfully in Australia in recent years, but tailoring this one to both its convenience stores and at a time when more Australian's will be holidaying at home is a smart move.

What do we expect?

The first mention of price cuts and value in Australia usually leads to the inevitable headline of a price war. However, leading grocery retailers have significantly benefited from the pandemic over the past 12 months and offering value to shoppers and helping ease the recovery from the pandemic will be a priority. Grocery retailers in particular have a vital role to play here in supporting communities, the pandemic may be subsiding but the recovery will take some time and therefore balancing shareholder profits will be managed accordingly alongside doing the right thing. 

There remains much economic uncertainty ahead, while on top of this retailers are starting to cycle probably the toughest LFL sales targets they have ever experienced. Price is one element that Coles and other retailers will leverage in the coming months to manage their business and look to retain customers. While clever marketing that resonate with shoppers, as well as exclusive ranges are other tactics. Both of these will open up new opportunities for suppliers to think creatively and drive stronger collaboration with their retailers.