Woolworths urged to prepare for coming grocery price war

 In Australia, NewZealand, Woolworths
Woolworths has been urged to dump grocery price promotions such as Cheap Cheap in favour of deeper cuts to everyday prices and fewer, deeper weekly specials to limit the damage to sales and margins from an impending grocery price war.
As Coles and Woolworths slashed the prices of products such as Cadbury chocolates, Energiser batteries, Kirks soft drinks and Morning Fresh dishwashing liquid by as much as 50 per cent over Easter, analysts warned that the risk of a full-blown price war appeared to be rising.
Woolworths, Coles and Metcash’s IGA retailers have increased the depth and frequency of promotions and cut shelf prices on hundreds of food and grocery items since Woolworths flagged plans in February to invest more than $500 million into reducing prices and improving service in supermarkets to protect its market share.
Woolworths chief executive Grant O’Brien has dismissed suggestions the price cuts could trigger an all-out price war similar to that in Britain, where margins at the big four supermarket chains have fallen by 200 points, or 50 per cent, in three years.  Sydney Morning Herald – Read more…

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