The Fuel And Supermarket Discounting War Between Coles And Woolworths Has Analysts Concerned For Investors

Getty/ Greg Wood

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:

    Coles

  • 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.
  • Woolworths

  • 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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