Good pricing central to Woolworths plans says supermarket boss

Woolworths supermarkets boss says good pricing is central to its plans as it looks to better cater to local ethnic communities.

Woolworths Supermarkets boss Claire Peters. Picture: Hollie Adams

Woolworths supermarkets boss Claire Peters has confirmed that the supermarket price wars are here to stay, telling the Australian Food and Grocery Council conference in Melbourne this morning that the nation’s biggest chain is squarely focused on lowering prices.

Price will still be important, Ms Peters said, both to Woolworths and it’s customer offer.

“Good pricing remains central to our plans,’’ she told a room full of food and grocery manufacturers.

However, Ms Peters also said Woolworths (WOW) would be injecting some “rationality” back into pricing of some foods and grocery products as it reacted to changes in Coles pricing and tweaked its own pricing plans.

“Not necessarily Coles’ lead, but I think rational pricing is what we try to do ... I think within all of our SKUs rationally around products that go across the basket for an every day customer is where we would want to continue to focus on every day essential items which is where our ‘price drop’ is targeted to.’’

But that price war is still ongoing, with Woolworths triggering its ‘price drop’ campaign for 350 items since the start of 2018 and in recent years the prices of 4,500 items slashed.

“But we absolutely will look to put some rational pricing into the market.’’

But she conceded Woolworths still had more to do in terms of price trust.

Ms Peters joined Woolworths last year as its new supermarket boss, coming from UK retail giant Tesco and arrived at a time when Woolworths was pushing back against arch rival Coles in terms of same store sales growth. It has invested more than $1 billion in lowering its prices, which has helped fuel its competitive edge.

Woolworths has also placed a greater focus on customer satisfaction under new CEO Brad Banducci, a strategy which Ms Peters confirmed was helping to push sales higher.

Ms Peters said “success is reaped when we have the customer at the heart of our decisions” and that in the last 12 months this purpose has been embedded in the Woolworths team to “do a little bit better” and do the right thing.

She said if they get it right, Woolworths customers would reward the chain with their loyalty and it was this customer satisfaction that was driving its recent sales momentum.

“Happy customers spend twice as much with us against those that don’t,” she said. “They spend twice as fast and the share of wallet grows.”

But there was still plenty to do, she added.

Ms Peters said there shoppers were looking for a “frictionless” shopping experience which meant making everything around their stores more seamless such as using ApplePay at checkouts and other digital services.

Woolworths would aim to have a tailored offer to suit all communities when it comes to range of products, and this would differ from community to community.

“One size fits all is no longer good enough.”

Customers are also calling for more in health and beauty, while shoppers at Woolies’ revamped Marrickville store in Sydney also wanted “genuine service” from staff when it comes to the offer around its in-store bakery, as digital touch panels had not had a great take up.

Woolworths is also looking to expand its range to better cater to local or ethnic communities around its stores, extending some ranges, and later looking at broadening its range of health and beauty products.