Supermarkets battle over price of bread

Coles, Woolworths and ALDI have all pushed the cost of a 650g store-brand loaf to 85¢ – about 4 cents per sandwich slice.

Woolworths lowered the cost of its Homebrand white bread last Thursday, and Coles dropped the price of its Smart Buy white bread on Friday. ALDI followed suit and lowered its price on Saturday.

Woolworths' media spokesman Russell Mahoney said the new price will not impact upon suppliers.

The price reduction is the lowest ever price on Homebrand white for Woolworths, which the supermarket said is in response to customer demand for value on everyday staples.

George Weston Foods supplies Woolworths' store-brand bread, which is baked in Australia.

According to Goodfood, Baking Association of Australia executive officer Tony Smith said the cheap cost of supermarket bread came at a cost to Australian bakeries. “Basically it's a disgrace. All they're doing is bastardising the industry. Bakers can't make a loaf for under $1.50,” he said.

“It puts the local baker out of business and people out of jobs. Small business doesn't need this at the moment.

For Coles, the 85¢ cost is a further reduction on the $1 price tag on Smart Buy bread from the Coles' “Down Down” campaign in 2011.

Coles communications manager Jasmine Zwiebel said there had not been any supply problems with the discounted Smart Buy bread. “Bread is a staple in Australian households and will always be a popular item on the shopping list. Therefore, we will continue to ensure we have the quantities required to meet customer demand.”

Tom Godfrey, head of media at Choice, said getting consumers into the supermarket is the primary purpose of these types of discounts, but that another possible reason for the discounting is the growth of Aldi supermarkets.
“Particularly in the eastern states, Aldi is increasing its market share, with more people getting very cheap items from the 1500 product lines they stock,” he said.

Godfrey also suggested that consumers should ensure they are getting value for their money. "Price is one thing but you've also got to look at quality of the products," he said.

The Senate inquiry into supermarket giant Coles’ decision to slash the price of milk to $1 a litre has found the dairy industry has not suffered as a result.

Similarly, in 2011 Coles, then Woolworths lowered the price of store-branded milk to $1, and experienced a backlack from dairy farmers, who said they will be pushed out of business, through “unsustainable” prices.

A senate inquiry, into Coles’ decision to slash the price of milk has found the dairy industry has not suffered as a result and the ACCC concluded there was no problem with Coles’ decision.


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