Woolies blinks in supermarkets’ price war

 In Australia, NewZealand, Woolworths
Woolworths has blinked. For years it has been fending off a "down down" price-based attack on its supermarket business from the resurgent Wesfarmers-owned supermarket chain, Coles.
Now, chief executive Grant O’Brien says Woolies is off the pace on prices, and will respond.
"We were competitive, but we can be cheaper," O’Brien said at a profit briefing on Friday morning.
But investors clearly think the doing will be tougher than the saying: Woolies shares were down more than 8 per cent after the result came out.
Woolworths has been a profit-making machine for years, but its first half-profit result on Friday was littered with bad news, including a big writedown in its merchandise retail chain, soft same-store supermarket sales, a 3.1 per cent profit drop at group level and a full-year profit guidance downgrade.
Its expansion into hardware retailing has been a loser, it is struggling to turn its BigW merchandise retail chain around, and is now being forced to respond more aggressively to price-based supermarket competition from the Coles and the Aldi chains.  Sydney Morning Herald – Read more…

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