Karl Stefanovic: Well the boss of Coles has said something pretty incredible in the last 24 hours, and incredible I mean, let’s take a little close-up look at it – he’s admitted Aussie’s are paying “crazy prices for our groceries” – that means too much.
John Durkin, we salute you this morning.
How good to finally hear a supermarket boss admitting he’s been fleecing us for years…feels good doesn’t it?
Our finance editor, Ross Greenwood, is here.
Ross, good morning to you…
Ross Greenwood: Good morning …I was going to say, have you paid $48 a kilo for cutlets? That’s what I worked it out…
Karl: See? If you’re doing with a smile on your face, we finally had confirmation of what we knew for years…
Ross: And that is that Australian supermarkets are the most profitable on the planet.
And that’s why they’re the most profitable on the planet.
Not only are they very good supermarkets, with great supply chains, great buying power – but they can also charge us a premium for our groceries.
That’s why competition is good!
That’s why Aldi has been able to pick up 12 percent market share on the eastern seaboard in such a short period of time.
But it’s also why Coles now says it wants to invest more money into bringing down the prices.
Because, for the first time in more than eight years, Woolworths growth in supermarkets is now stronger than what Coles is.
Woolworths is now growing faster again than Coles and the reason for that because Woolworths took its shareholders money and put it back in to prices to reward the customer.
And so now, Coles is going to have to do exactly the same thing.
Karl: So the prices will come down now?
Ross: The prices will come down.
Grocery rip off
So Coles put $65 million of shareholders money in, in the first half of the year.
They’re going to accelerate that – they’re going to have a$195 million in the second half of the year.
The supermarket price wars are alive and well – you’ve seen the ads on the television.
Casey Donovan doing the “down-down” commercials again, they’re back, so this is part of the strategy for Coles to win back customers
Karl: What a nice fellow, the Coles boss
Ross: he’s at least admitted it to us, hasn’t he?
Karl: Yes, he has – a step in the right direction.
Ross: Those cutlets are few expensive…
Karl: $48 bucks a kilo…ridiculous
Ross: I know…