Value is not all, expert warns following Coles and Woolies results

The ‘big two’ supermarkets, Coles and Woolworths, shared their third-quarter results, exceeding expectations, but confirming that the grocery price war is far from over.Woolworths’ supermarket sales grew by 3.4 per cent while Coles’ supermarket sales grew by 3.7 per cent over the same quarter. “These results reflect the continued investments we are making in value and in improving the shopping experience for our customers both in store and online,” Leah Weckert, Coles Group CEO, said in a statement. Coles and Woolworths’ respective CEOs both confirmed that lowering prices to attract cost-conscious shoppers remains top of mind. “We’re seeing a lot of value-seeking across our grocery areas, and that’s where we’re seeing an increasing number of products for own-brand perform particularly well,” Amanda Bardwell, Woolworths CEO, told reporters on a call.The real price of value The two supermarkets have been clear about their respective value propositions for years. In 2010, Coles launched its “Down Down, Prices Are Down” promise, and in 1987, Woolworths launched its “Fresh Food People” campaign.Weckert said on April 30 that Coles was prioritising big price drops on household staples with discounts of between 40-50 per cent on popular items, while Bardwell said on May 1 that Woolworths’ home-label brands remained popular among customers in categories offering discounts of over 40 per cent.“Choosing where to shop for groceries is a decision most consumers make weekly – often multiple times a week – so it’s critical that retailers continuously evolve their value propositions in line with shifting preferences, behaviours and needs,” Teresa Sperti, founder of Arktic Fox, a consultancy specialising in e-commerce and capability development, told Inside Retail.“In today’s economic climate, price and value are understandably top of mind for a large cohort of shoppers, and they play a central role in driving choice. But value doesn’t exist in isolation,” she continued.“Different shopping missions influence consumer sensitivity to price and value – some place greater importance on convenience, quality, or experience based on the mission.”  Sperti said supermarkets and marketplaces must weigh up all these aspects when considering their value propositions in the current economic climate.“While the current environment demands a sharper focus on value, it’s not the only lever,” she stated. “Retailers must take an ‘and’ approach – balancing value with other core elements to remain relevant across diverse customer segments,” she added.The often forgotten valueSecond to value, availability is a critical factor for supermarkets – an area where online marketplaces like Amazon are superseding traditional retailers, including Coles and Woolworths.“Delivery windows and click-and-collect pickup are key moments of truth that shape the customer experience,” Sperti explained.“Since the strike late last year, Woolworths appears to be facing ongoing availability challenges online, which undermines the core convenience promise of digital shopping,”  she added.The impact of last year’s two-week strike that interrupted supply chains and affected consumers’ access cost Woolworths $240 million in sales.“Availability issues don’t just risk the loss of a single item sale – it can lead to abandoned baskets, reduced basket size, or even customer defection over time,” Sperti concluded. “That’s why maximising availability is essential not only for short-term profitability, but also for long-term retention and customer lifetime value.”