In the competitive world of retail, supermarkets are constantly seeking ways to keep prices low and attract budget-conscious consumers. This has led to a significant shift in strategy for Australian grocery giants Woolworths and Coles, who are increasingly focusing on expanding their own-brand product ranges. However, this move towards mimicking the low-cost model championed by ALDI and Kmart comes with a warning: it could potentially alienate loyal customers and hurt local Australian brands.
The allure of home brand products is undeniable. They offer a cheaper alternative to name brands, often at a discount of up to 40%. This is because supermarkets have complete control over these items’ production, supply, and marketing, cutting out the middleman and passing the savings onto consumers. ALDI’s success in Australia has been largely attributed to its focus on a limited range of products, most of which are its own brands, allowing it to offer lower prices compared to the 20,000 to 25,000 items stocked by Woolworths and Coles.
But what does this mean for the shopping experience of the over-50s, who often value familiarity and quality over cost-saving? There’s a certain comfort in walking down the aisle and finding the toothpaste, olive oil, or breakfast cereal you’ve trusted for years. Flinders University retail expert Professor Roberta Crouch highlights many people’s resistance to changing supermarkets, let alone switching beloved brands for lesser-known alternatives.
The trend towards own-brand products isn’t just about what’s on the shelves; it’s about the potential disappearance of customer favourites. As Coles and Woolworths increase their home brand offerings, there’s a risk that smaller, local brands could be squeezed out. This not only affects consumer choice but also has broader implications for the Australian economy, particularly for small businesses that rely on supermarket shelf space to reach customers.
For those of us who have seen our preferred products vanish, the solution may involve shopping around. Finder research indicates that a third of shoppers now spread their grocery shopping across multiple stores to find everything they need. This fragmentation of the shopping experience can be frustrating and time-consuming, especially for seniors who value convenience and simplicity.
The supermarkets, for their part, maintain that proprietary products remain a crucial part of their business model. Coles CEO Leah Weckert and Woolworths boss Amanda Bardwell have both emphasised the importance of balancing own-brand and name-brand products to cater to customer preferences. However, with the consumer watchdog’s probe into the sector, there’s a growing call for scrutiny over the long-term impact of the home brand expansion.
Consumer group CHOICE has urged the watchdog to consider the findings of New Zealand’s Commerce Commission, which warned that while private label products might increase choice and lower prices in the short term, they could ultimately reduce variety and increase prices in the long run.
As supermarkets continue to evolve their pricing and product strategies, the balance between affordability and variety remains a key concern for many shoppers. While some may welcome lower prices, others might feel the impact of fewer familiar brands on the shelves.
Have you noticed a shift towards home brands in your local Woolworths or Coles? How has this affected your shopping experience? Share your thoughts and stories in the comments below!
Also read: Coles and Woolworths respond to sneaky pricing accusations
Will they be the same as Aldi and not have a stock of items for weeks? I quite like the Cornflakes that Aldi normally carries, but for the last 8 weeks, they haven’t had any, and it happens with other items as well, so Aldi isn’t the be-all and end-all that people sprout about.
over teh last 5 years I have sent complaints continuously to the regulator and I know others have too. it is all about Aldi’s advertising doing a comparison of their own brands against the mainstay major brands of products, rather than doing cost comparisons against Woolies and Coles own brands (which would be much fairer, and yet we are told that it is not false advertising. obviously two sets of standards again. In today’s cut throat climate i agree with any initiative to get manufacturing and processing back up and running in AUS, rather than allowing practices that hide the real truth and contribute to further decline. as was recently reported ALDI keep prices low by stocking an overall shop range of around 20,000 different items, whereas COLES and Woollies stock around 50,000 plus different lines. Aldi add card processing fees to shoppers’ bills, but Coles and ‘woolies have resisted doing this to date. Again it looks like the consumer is the loser.
Step up Australians, but local or manufactured in WA, not just 10% Austalian content, but above 80% would be prefereable to getting the little Australian made sticker.
Reducing the range and discarding brands that have survived for decades is just a blantent cash grab, Woolies and Coles make multi billion turnovers every year, but are always crying “we don’t make much profit”, even getting ride of check out staff, and shelf filling staff from restocking after closing time. Makes my heart bleed!!!!!!!!!!!!!!!!!
I was once a supporter od woolies and coles, but now I spend most of my grocery money in independents and small supermarkets.
Fresh and Save, at Richland
T-bone supermarket, at Chermside
Butcher and Greengrocer at Blunder rd. Oxley
Primo butchers, at Wacol
IGA at Jindalee and Goodna
Lets hit woolies and coles where it hurts, show them we are no to be pissed about with their scams, false “savings” and reduced services and products. Support the independents then skip the greedy conglomerates for two weeks and see how they like seeing their bottom line depleted by millions of dollars
Any idiot knows that once competition disappears the duopolies and Aldi will just put the prices of their brands up.
If some consumers only care about price, even when they’re on high incomes, and not supporting the Australian made and owned companies, then they can’t whine later on the consequences.
The own brand often do come down the same production line as the name-brand. But, there is tremendous pressure to reduce the cost of the own-brand product beyond cheaper packaging. It can be the B and C grade product going into the own-brand pack or lower proportion of the more costly ingredients.
This may be a contributing influence in the apparent increase in “shrink flation” where we find that what was a 1 kg pack has been replaced with an 850 gm pack at the same price.
I’ve noticed this with name brand corn flakes and chocolates.