Choice slams Coles and Woolies over low price claims

Rosie Baker
By Rosie Baker | 4 June 2015
Coles "Down Down" campaign.

Coles and Woolworths have been lambasted by consumer watchdog Choice over the low price claims made through their respective advertising slogans; Down Down and Cheap Cheap.

Choice's Supermarket Price Survey was published today (4 June) claiming that the supermarket giants are “not so cheap cheap”.

It claims that on the selection of items it bases the survey on, Aldi is 50% cheaper than buying brands at the two leading supermarkets.

The difference in price between branded goods at Coles and Woolworths was also barely distinguishable with just $1.80 between the two.

“Coles and Woolworths bombard consumers with advertising jingles and flashy promotions designed to convince us we are getting great prices, but our latest survey shows the big retailers’ price claims are going down down,” said Choice spokesman Tom Godfrey. 

The survey looks at the average price of a 31 items, including staples such as sliced bread, cheese and toilet paper, at Coles, Woolworths, Aldi and IGA. It selects the items from 93 supermarkets across Australia. IGA came out as the most expensive – 8% more than Coles. It claims that the basket of branded items costs $174.97 on average at Coles and $176.77 at Woolworths. The equivalent products at Aldi cost $87.68.

Woolworths refutes the validity of the survey saying that basing it on a small number of products doesn't reflect the true picture.

A Woolworths spokesman said: "Woolworths customers get great value across a whole range of brands they know when they shop with us. We won't be beaten on price and recently announced we are investing another $150 million across our stores to further lower our prices.

"Comparing a handful of products is rarely an accurate way to judge prices across a whole weekly shop. We survey thousands of prices regularly and we know that when you properly compare like for like products we offer customers a range that competes well with other supermarkets. Products like our Homebrand and Select products offer great value and quality and we are looking to do even better in this area in the future."

Likewise Coles batted away the accusations highlighting its ongoing price lowering efforts and claimed that its research showed that over the last six years an average household can save $570 on grocery shopping a year..

A spokeswoman for Coles said: “Coles has been unrelenting in driving down prices for our customers over the past six years, and that will not change. We are constantly lowering costs throughout our business to deliver better value at the checkout. Coles is proud to have recorded average annual food and liquor deflation of 1.5% over each of the past five calendar years, compared to average annual food inflation of 1.6% as measured by the ABS over the same period.

"Compared to six years ago, an average Australian household can save an average of $570 a year by shopping at Coles and we are absolutely committed to further reducing prices for our customers so they can save more at our supermarkets.”

In April, Choice found that 75% of Australians are “feeling the pressure” of the cost of groceries, and claims that private label – led by Aldi - will continue to grow as the cost of branded goods is seen as high.

While buying private label is cheaper than branded goods, the report found that Coles' private label selection was 23% higher than Aldi, while Woolworths' brand was 27% more.  However, the comparisons between Aldi prices and the supermarkets' private label brands are based on the mid-tier rather than the value options, which the supermarkets would argue does not reflect a fair comparison.

“Savings, low prices and value for money are the top priorities for grocery shoppers, so it’s likely the growth of private label will continue and Aldi is in the box seat,” said Godfrey.

“If Aldi’s no frills experience is not your thing, but lowest price is a priority, you can still save 35% at Coles and 33% at Woolworths by swapping leading brands for the chains’ private label equivalents.”

Prices also differ state to state with ACT the cheapest, and WA the most expensive.

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