Why a major supermarket is cutting out specials

One of the big Australian supermarkets is cutting out special promotions.

Instead, Coles says they will invest in service and keep every-day low prices.

A report by The Sydney Morning Herald says the idea is to prevent customer distrust and because the Wesfarmers-owned supermarket chain has been under pressure from Woolworths and Aldi.

Coles Chief executive Richard Goyder said the strategy would be to move more products to the every-day low prices to cement a trust in Coles prices. “There are more [promotions] than we would like … because it ultimately breeds distrust,” Mr Goyder says. “We can’t move the entire range of every-day low prices … but there are some products that move around dramatically and we would like to move away from that.”

The changes wont happen all at once. Coles boss John Durkan says “We are never going to do it in one big hit, it will be in a measured way and eventually the cost savings will pay for the price reductions.” The move seems to already be underway with Durkan saying they had invested more in reducing important basket items such as mince, chicken and cheese to new every-day low prices to “stay ahead of the curve”. “This is a proactive decision to invest in price and service, the cost savings will come later,” Mr Durkan said.

Do you rely on regular specials or does a set price help your budget?