Fruit and vegetables will become the new battleground for Australian supermarkets’ price war after Coles announced it will reduce the price of selected products by up to 50 per cent from today, the Sydney Morning Herald reported.
If Woolworths follows suit, fresh produce will become the latest product to be heavily discounted by the supermarket giants, following price cuts to milk, bread, toilet paper and washing powder by both companies in the past year.
The peak body representing vegetable growers, AusVeg, said the announcement was ''concerning'' because, while an oversupply of produce this season meant some growers would benefit in the short term, it was unclear the effect the price reduction would have on the industry over time.
The general manager for fresh produce at Coles, Greg Davis, said the company had worked closely with growers to transform their fresh fruit and vegetable prices, investing in new growing techniques, quality control, in-store displays and now lower prices for customers.
A spokesman for the company, Jon Church, said it had invested millions in the campaign but had worked with suppliers on an agreed price.
A spokesman from AusVeg, William Churchill, said the push by the main retailers for market share would place pressure on other growers who did not supply Coles, as competitors tried to replicate the offer to their customers.
''We can see that the supermarket wars have well and truly arrived in the fresh produce industry and this fight will get savage," Churchill said.
A spokeswoman for Woolworths, Claire Kimball, would not comment on whether it would follow suit, but said fruit and vegetables prices had been falling for the past year due to the volume of produce available.
Woolworths announces its second-quarter sales today. Goldman Sachs expects it to report lower growth in food and liquor sales compared with Coles, which reveals its sales on Thursday.
More at Sydney Morning Herald