Suppliers back Woolworths’ brand strategy as Coles feels pressure

 In Australia, Coles, NewZealand, Woolworths

‘Budget-conscious mums’ are the reason Coles is telling its suppliers they cannot put up their prices.

As Woolworths and Coles have engaged in an increasingly fierce price war to win customers some suppliers are concerned that they will bear the burden.
The concern is particularly strong around Coles after Woolworths’ second-quarter sales growth win over supermarket rival Coles.

Also Woolworths’ focus on promoting brands is proving a hit with some producers who fear Coles’ private label strategy and planned reduction in its total number of product lines could hurt sales in the long term
Suppliers at a Coles forum last week say it was made clear that price rises would be hard to come by because the ‘mums’  of Australia would not accept them.

"Coles said it would not accept price increases on behalf of mums and that any price rises could accelerate its private label strategy," he said.

"It felt like a shot across the bow." Sydney Morning Herald – Read more…

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