Drastic discount increases from both rival supermarkets Woolworths and Coles has analysts warning investors that the latest outbreak of discounting could squeeze margins and affect consensus forecasts.
In a bid to win market share here is what both supermarkets are offering:
- Petrol discount doubled to 8¢ until the end of October, and 16¢ off until Sunday when customers spend $100 on groceries.
- Up to 50% off a wide range of groceries under a new promotion called “Unreal Deals”, new products to its “Down Down” campaign and huge price cuts in 600 convenience stores.
- Petrol discount doubled to 8¢ when customers spend $30 on groceries and $5 in petrol shops, as well as 15¢ a litre off petrol when customers spend $100 on groceries.
- Up to 60% off grocery prices under promotions such as More Savings Everyday, Big Family Specials and Extra Special Savings.
The aggressive fuel discounts, funded from the retailers’ supermarket marketing budgets, are estimated to cost Coles $180 million and Woolworths nearly $250 million a year, reports The Financial Review.
Citigroup predicts Coles’ store sales, for the three months ending September, will increase by about 3.9% gaining on larger rival Woolworths which will rise 2.7% in the same period.
The AFR has more.
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