Woolworths’ new pricing and value strategy (see C&I WEEK issue 120, 2015-05-07) has left Coles managing director John Durkan unruffled. Mr Durkan outlined plans for the retailer to expand into new channels and services and improve its customer offer ?including a focus on from Coles Online as a source of growth ?at a Wesfarmers strategy briefing day in Sydney this week.
According to Mr Durkan, “Online is an important part of a customers’ weekly shopping activity,” and the Woolworths’ ‘Click and Collect’ service has seen a 36% increase in participation so far in the 2015 fiscal year and the service will continue to see growth with the opening of additional 50 Click and Collect sites.
Mr Durkan said, “Our customers tell us they want their online shop to be simple and they want their shopping at a time that suits them.”
Mr Durkan also flagged an increase in ‘own brand’ products saying Coles brands were the “middle ground” for everyday Australians and the retailer would launch its own brands ?such as its 99 cent Coles Scotch finger biscuits ?across most categories at “everyday pricing”.
“We want a range of products across many categories as we can that customers are willing to purchase from us,” he said. “High quality Coles brand products at everyday prices that allows shoppers to get into those categories at a reasonable price.”
Coles would continue to focus on simplification and reducing costs, according to Mr Durkan. Mr Durkan also noted that improvements in operational productivity, such as a refinement in store picking efficiency and further simplification of fleet operations would assist in maintaining profitability.
Both Coles and Woolworths profit margins have been impacted by the supermarket price war, however Coles’ quarterly food and liquor sales were up 5.4% compared to Woolworths’ 2.3% growth.