Now for a war over chickens, flags Coles
COLES chief Ian McLeod has signalled the next battle between Australia's two biggest supermarkets will be over fresh chicken.
On the eve of his Senate inquiry appearance into the grocery price war, Mr McLeod has defended Coles's price war with rival Woolworths, claiming that its customers have saved more than $800 million on their grocery bills in the past 12 months.
The Senate inquiry was originally formed to investigate the milk war and the effect of the discounts on dairy farmers. It has since been widened to include the price of beer, eggs and other consumer staples.
Mr McLeod said Coles's ''Down Down'' campaign would continue, despite a backlash from farming groups and government.
''The latest product to have prices reduced as part of our Down Down campaign is fresh Coles chicken and we have more price cuts planned in the next few weeks,'' Mr McLeod said.
He and his right-hand man, merchandise director John Durkan, are expected to face two hours of tough questioning when they appear before a Senate economics committee inquiry in Canberra today.
Representatives of Woolworths will also appear before the inquiry, where they will be asked about the impact of the supermarket price war on farmers and on competition in the grocery industry.
Coles fired the first shot in the price war last month, slashing its house-brand milk to just $1 a litre.
A war room comprising the Coles senior executive team yesterday met for three hours in Melbourne to prepare for today's Senate inquiry. At lunchtime yesterday, Mr McLeod gathered his senior executives for a one-hour meeting that dragged on until well after 4pm.
''Coles is looking forward to explaining to the Senate committee how it is committed to reducing shelf prices for Australian shoppers, while ensuring that primary producers are not disadvantaged in the process,'' a spokesman said.
Australia's second-biggest supermarket chain issued a statement claiming the price war instigated by its ''Down Down'' campaign was helping to ''put money back in customers' pockets to help make ends meet''.
''Australia may have escaped the worst of the global financial crisis but many families are still struggling to make ends meet in the face of higher household costs,'' Mr McLeod said.
''Our job at Coles is to offer all our customers quality food that costs less, and the information we have released today shows that we are doing this. No matter what your household circumstances, our Down Down price cuts are bringing real savings to real Australian families every day.''
According to data compiled by Coles, Victorian families are saving more than $55 a week as a result of the campaign. Couples with an infant are saving $41 a week, while couples are saving $21 a week.
Independent senator and economics committee member Nick Xenophon has been the most vocal critic of the price war, claiming that the two leading supermarkets are ''drunk on their market power'', and describing the competition watchdog as a ''a toothless chihuahua''. Farming bodies have also warned the price war will drive customers to own-brand items, and will lead to reduced competition.
The baskets of items selected by Coles to calculate the savings for Australian families include a large proportion of own-brand products.
Woolworths representatives Pat McEntee and Natalie Samia are also scheduled to front the Senate inquiry this morning.