SupaValu store in Delahey to shake up supermarket wars

In a bid to draw customers back to IGA, a new store is promising it’ll become the “best cost-cutter supermarket” and a one-stop shop for all your groceries.

The first in a line of discount, warehouse-style supermarkets has arrived in Victoria and is set to spark a price war with the state’s major chains.

IGA will officially open its first “SupaValu” store in Melbourne’s northern suburbs on Wednesday, promising its bulk-buying supply model will pass on lower prices to customers.

The store will open at the renovated site of Morgan’s IGA in Delahey, which has traded at the address since 2005.

Its layout has been designed to make shopping easier for people who prefer to buy all their goods for the week in one visit, with a “supa valu aisle” in the middle of the store including large amounts of stock still on pallets.

Opening discounts include brushed potatoes at just 40c per kg, and more than $15 off jumbo Huggies nappies.

Jay Morgan and Neal Morgan at the new store in Delahey. Picture: Josie Hayden

Owner and managing director Neal Morgan said the store’s new business model had slashed operational costs, but would not compromise the quality of its products.

“From my perspective this is the best cost-cutter supermarket model I’ve ever seen in 50 years, and we’ve dibbled and dabbled with a few different variations at the cheaper end of the market,” Mr Morgan said.

“Our quality is still second to none, we’ve got our own butchers on site and we’re baking our own bread.”

Mr Morgan said his family had been in retail for decades, and growing pressure on IGA chains in recent years had made clear the need for “significant change”.

“When we first opened in Delahey it went gangbusters because we were one of the first supermarkets here … we have been slowly but surely getting squeezed out of the market, so we needed to make a change in order to get traction.

“The Delahey customer is price-driven, it’s a very densely populated area and I hope that we will go gangbusters again.”

SupaValu head of channel Steven Stewart said Metcash, the IGA’s parent company, had done extensive research on how it could “surprise and delight customers”.

“One of the things we recognised is that we weren’t really catering to what we call ‘big basket’ shoppers in our network, so we wanted to design a format that targets those shoppers who might be Aldi, Woolworths or Coles regulars,” Mr Stewart said.

The new layout would not be perfect and feedback was wanted from Victorians before more stores of its kind were rolled out across the state, Mr Stewart said.

“It’s deliberately designed to be different – but if something’s not right, we want to know,” he said.

“We would love to hear from Victorians about how they see it, and if they like it, vote with their feet, because we are absolutely going to be looking for more locations across Melbourne.”