WOOLWORTHS has unveiled another round of "permanent" price reductions on hundreds of grocery products in a bid to boost foot traffic and sales.
Australia's largest grocery retailer has cut the price of fresh foods such as meat and packaged groceries such as bread and cereal by as much as 30 per cent, promising to retain the lower prices for at least six months.
Woolworths says it will absorb 100 per cent of the reductions on meat and produce but the discounts in packaged groceries will be funded by suppliers.
Woolworths will give these suppliers more shelf space in anticipation of higher volumes and is investing in catalogue and television advertising to promote the new price cuts. Woolworths has been tapping suppliers for better deals as part of its strategy to "defend and extend" its share of food sales.
Same-store sales growth at Coles, which has cut prices on more than 5000 grocery products as part of its 'Down Down' campaign, has exceeded that at Woolworths for 15 consecutive quarters. Analysts expect the trend to continue in the June quarter.
Coles managing director Ian McLeod said the chain had cut prices on a wider range of products over three years and many products discounted by Woolies were cheaper at Coles.