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Coles’ big gamble on Every Day Price program to win back Aussies – as stock plunges amid inflation battle stretching household budgets
Coles is bringing back its Every Day Price programme as it tries to win back shoppers who are increasingly comparing prices and splitting their spending across retailers. The move means locking in lower prices on thousands of products for at least six months, accepting a short-term hit to profits in the hope of building customer loyalty.
Chief executive Leah Weckert said in-store sales momentum was a concern despite strong online growth, as Coles faces promotions from Woolworths and competition from Aldi, Chemist Warehouse and Amazon. Coles shares fell 7.7 per cent to $21.66 on Friday, their weakest level since March 2020, and closed at $21.28 on Monday; higher fuel costs also weighed on the business. The new programme replaces the Down, Down promotion, which followed an ACCC case over claims that prices were raised before discounts were advertised. Coles reported group sales of $11.2 billion, up 2.2 per cent, in the 13 weeks to 27 September.
In short
- Coles is reviving six-month price locks to attract budget-conscious shoppers.
- Its shares fell 7.7 per cent on Friday.
- The move replaces a promotion criticised in an ACCC case.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Locking in lower prices on thousands of products could give households more predictable relief as inflation strains budgets, while helping Coles rebuild trust and loyalty among shoppers who are comparing prices across retailers. Accepting lower profits in the short term may be a reasonable investment if it strengthens sales and keeps the business competitive over time.
The case against
A broad price-lock programme may squeeze profits without persuading shoppers to return, especially when rivals such as Woolworths and Aldi are also competing on price. Investors may reasonably question whether Coles can sustain lower prices while fuel and other costs are rising, and whether the programme will deliver lasting value after concerns raised by the earlier promotion.
Explained simply
Coles is one of Australia’s largest supermarket chains, competing with Woolworths, Aldi and other retailers for shoppers’ grocery spending. When household budgets are under pressure, customers may compare prices more closely or buy different items from different stores.
An Every Day Price programme keeps selected prices low for a set period, rather than relying on short-term specials. For Coles, this can mean earning less on some products in the near term while seeking to encourage customers to keep shopping there.
The programme replaces Down, Down, a promotion that came after an Australian competition regulator case about how some discounts were advertised. Price offers matter to shoppers, while Coles’ choices also affect its sales and profits in a competitive supermarket market.
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