Grocery bills look set to be slashed

GROCERY bills could be slashed after a leading supermarket chain vowed to end store price variations.

In a provocative move to increase its share of the nation’s $90 billion grocery market, Coles yesterday said its products would cost the same across 151 Queensland locations.

The move – the latest salvo in the increasingly fierce supermarket wars – brings Coles into line with independent grocer Aldi, which introduced a similar policy in 2008.

In response to the announcement, Woolworths said it had been trying to offer postcode-free prices for years.

Under the changes, which come into effect on February 1, shoppers in isolated or wealthy areas will no longer pay a premium because of where they live.

Consumer groups have hailed the news as a victory for shoppers and a much-needed injection of competition into the Australian market, one of the most concentrated in the developed world.

But consumer and competition law expert Associate Professor Frank Zumbo said Coles had more work to do to increase its pricing transparency.

“With these types of announcements, the devil is always in the detail and the onus is on Coles to tell consumers which products will be affected and by how much retail prices will change on the affected items,” he said.

Prof Zumbo said Coles consistently rated lower than other supermarket players in customer satisfaction surveys and was “clearly playing catch up”.

But Choice spokesman Christopher Zinn labelled the policy a “meaningful move” in the supermarket wars.

“Unlike things like fuel discount schemes and free DVDs, this is much more significant than the usual gimmicks the big supermarkets use to gain market share,” Mr Zinn said.

“There’s been concern for years that people in less competitive suburbs are paying increased prices, so this is a big win for them.”

Coles spokesman Jim Cooper said the policy would exclude fruit and vegetables and products approaching use-by dates, but would see 97 per cent of products price matched across the state. A further 8000 products would be price matched nationwide, with the lowest prices adopted across the board.

In its 2009 Corporate Responsibility Report, Woolworths said it offered more than 1000 products at the same price, regardless of location.

“For branded products we aim to ensure prices are the same at stores within each state,” the report said.