Printers angry as Coles goes digital and dumps catalogues

Coles’ decision to using stop printed catalogues delivered to letterboxes brings an angry response from the printing and distribution industry.

Coles chief Steven Cain says the company’s new digital promotions are a better fit with consumers’ current shopping habits. Picture: Andrew Henshaw

The acceleration of online shopping that has been supercharged by the COVID-19 pandemic has could finish off the popular weekly specials catalogue shoved in people’s mailboxes, as companies ditch old-world leaflets for flashy websites and interactive digital catalogues.

Coles announced on Tuesday it will dump its printed weekly specials catalogue distributed by an army of 14,000 walkers across 7 million home letterboxes, sparking what could be a landrush of leading national retailers that will follow and cease production of the specials magazine.

Although Coles will continue to offer its weekly catalogue in its stores, it is nudging consumers to a new specially created online catalogue and interactive website called coles&co as they no longer can access from next month the catalogue from their letterbox.

The ASX-listed IVE Group, which prints and distributes a host of catalogues and printed advertising material for retailers including Coles, issued a statement to the ASX acknowledging the decision and revealing the loss of Coles would cost it $35 million to $40m in lost annual revenues. Its shares immediately tanked more than 30 per cent on the news before closing down just over 20 per cent.

During the first wave of the COVID-19 pandemic in March, Coles, Woolworths, Big W and other large retailers suspended their popular printed mail catalogues, with consumers easily switching to online as they were stuck at home, but Coles is the first major retailer to now permanently end the publication for letterboxes as it focuses on its digital advertising and marketing assets.

Coles group chief executive Steven Cain said with COVID-19 the retailer has seen a shift to online shopping in the last few months, as more of its customers try the supermarket group’s contactless home delivery and click & collect services for the first time.

“We’ve also seen an increase of more than 50 per cent in readership for our digital catalogue since March,” Mr Cain said “We are living at a time of unprecedented societal change, including a surge in the diversity of consumer tastes and dietary needs. As customers add more fresh food to their diet they’re shopping more often, and their appetite for immediacy and digital information means a weekly, one-size-fits-all, catalogue in their letterbox is no longer as relevant for them as it once was.”

However the printing industry has hit back, accusing Coles of employing disingenuous environmental arguments for its reasons to end its printed catalogue as well as triggering possible job losses just at a time Australia is entering a recession.

The Real Media Collective, the Australian industry association representing the interests of companies in the paper, print, publishing/media and related distribution sectors across Australia, savaged the decision by Coles to end letterbox drops.

Kellie Northwood, chief executive of The Real Media Collective said in a statement provided to The Australian: “The claim that Coles is stopping production of its supermarket catalogues due to environmental concerns is simply disingenuous.”

She said for every Coles customer spending 60 seconds browsing a digital catalogue they will emit 12g of CO2 compared to looking at a printed catalogue for a day and only emitting 0.5g of CO2. “All of Coles catalogues are made from a renewable resource, using bio-diverse and planted forestry principles, and the paper making process is powered by hydro-electricity – paper carries the highest environmental credentials over e-waste and CO2 powered digital streaming.”

Woolworths told The Australian it would continue to print and send out its catalogue to people’s homes.

“We know how important value and specials are to our customers right now. We’ll continue to offer our printed catalogue alongside our digital version for the foreseeable future, so our customers can discover specials in the way that works best for them.”

Coles chief marketing officer Lisa Ronson told The Australian the retreat from catalogues delivered to people’s home was an international trend that many supermarkets were following, and made sense in Australia as there was a continued shift to online shopping and perusal of digital catalogues by consumers.

“It is something that we have been thinking about, obviously in our mission to become Australia’s most sustainable supermarket we do look at all aspects of our business. And we have prior to COVID-19, but in COVID-19 you would have seen all of the global and national sales have dramatically increased online,’’ she said.

“Viewing of catalogues and online shopping, all the aspects of what customers are doing and the global trend has been that before customers go and buy, really anything that they shop for, they go and find inspiration online and do their research online really.”