Coles shoppers are paying a hefty premium on some groceries when they shop online and use the supermarket’s supposedly free “click and collect” service or home delivery.
Fairfax Media compared in-store and online prices on 10 popular brand label items at Coles and found eight of them were 10 per cent more expensive for online shoppers.
Coles charges between $4 and $14 to deliver orders under $150 in metropolitan areas, depending on when the customer is available to receive it.
Online orders can also be collected from some stores using its “click and collect” service, which it advertises as being free.
But the supermarket said that customers are charged extra on some products to cover the cost of picking and packing online orders.
“There are some categories where we apply a small price premium and this is to help cover the cost of our convenient service, including the dedicated team members who select our customers’ groceries,” a Coles spokesman said.
He said that more than 70 per cent of products were the same price online as in store, including most fresh food, bread, milk, eggs and baby products.
The basket of goods used in the survey included staples like cheese, frozen vegetables, cereal and pasta. Milk and bread were the only items that were not more expensive when bought online.
The basket totalled $56.57 in store but $61.42 online – a price hike of 8.6 per cent.
Woolworths previously charged extra for some items online but stopped doing so in March 2015 so it could offer “better prices across our customers’ online shop than our competitors”, a Woolworths spokesman said.
Tom Godfrey, a spokesman for consumer group Choice, said it was time Coles “followed Woolies’ lead and price matched its in-store prices with its online offering”.
Nancy Georges, a retail strategist at Magnolia Solutions, said Coles risked confusing customers and losing their trust by being inconsistent across different platforms.
“Retailers do a lot work to make sure that what customers see online is what they see in stores,” she said.
Miss Georges said that despite supermarket shoppers being sensitive to price, online shopping was primarily driven by convenience and Coles would know what items it could charge extra for without losing customers.
Aussie retailers ‘more expensive online’
The Coles spokesman said all catalogue specials applied online but that some non-advertised specials were only available in stores. Fairfax Media’s product survey did not use discounted prices.
There is no extra charge for delivery on orders over $150, if the customer is willing to nominate a flexible eight-hour delivery window.
Australia has recently been identified as one of the few countries where big retailers’ prices tend to be higher online than in their stores.
A report by Massachusetts Institute of Technology economist Alberto Cavallo on global online price disparity released this month looked at prices at Coles, Masters, Target and Woolworths.
He found that prices in Australia were the same for 74 per cent of items, more expensive online for 20 per cent of items and cheaper online for only 5 per cent of items.
Argentina was the only other country out of 10 examined where prices tended to be higher online.
“Perhaps the retailer expects online shoppers to be willing to pay more, or they are simply trying to compensate for a delivery cost,” Professor Cavallo told Fairfax Media.
Australians will spend $2.4 billion shopping for groceries online this year according to market research firm IBISWorld – a tiny portion of the $88 billion spent in total, with Coles controlling 30 per cent of the online market and Woolworths accounting for 42 per cent.
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