Marketing experts: Aldi, Coles and Woolworths need to change advertising tune

Australia’s big three supermarkets need to change their advertising tune in 2024 for the sake of farmers and the retailers themselves, industry analysts say.

Discount-focused advertising by Australia’s big three supermarkets needs to be ditched in 2024 for the sake of farmers and the retailers themselves.

That’s the view of some of the nation’s top marketing experts, who say the grocery giants had made a rod for their own back with their ‘Down, Down’ and ‘Cheap, Cheap’ ad campaigns.

University of NSW marketing expert Nitika Garg said non-grocery advertising — such as clothing, recreational products and department stores — focused on quality rather than price and supermarkets would be advised to alter their approach given the growing unrest at checkouts nationwide.

“Supermarkets rely on the same marketing approach they had before 2020, before Covid and then inflationary period of 2022-23. By maintaining that same type of discount-advertising, they’ve failed to adjust consumer expectations,” Professor Garg said.

“The reference point that all of us have as shoppers changed due to inflation. But the marketing about locked-in prices sets an expectation that hasn’t been delivered.

“Take for example the supermarkets with their ‘locked down prices’ which were found to have changed.

“The customer sees one or two items on sale but the advertising implies that most of what is on sale is discounted and then they’re annoyed when they reach the checkout and they feel they have paid far more than they anticipated.”

British rockers Status Quo perform Down Down for Coles back in 2014

University of Queensland marketing expert Nicolas Pontes said when Aldi entered the Australian grocery sector two decades ago, Coles and Woolworths shifted their advertising message from a focus on freshness and quality to compete with the cut-price German retailer.

Farmers were outraged when the trend stepped up in the 2010s with loss-leader gimmicks such as dollar a litre milk.

“When you’re advertising so strongly ‘half-price’ products or ‘prices are going down’, you lower the price image of the supermarket,” Dr Pontes said.

“It makes consumers more price sensitive. Now that consumers are on a tight budget, and prices are going up, inevitably because of inflation which is out of Coles and Woolworths control, emphasising that prices are down doesn’t connect with the customer’s experience when they’re paying (at the end of their shopping).”

An Aldi spokeswoman said: “In over 20 years of operation in Australia, we have consistently delivered on our ambition to provide Australian shoppers with high-quality groceries at affordable prices.”

A Coles spokesman said: “At a time when cost of living pressures are mounting for many customers, Coles is committed to help Australians with a range of value campaigns to support customers in tough economic circumstances.”

A Woolworths spokeswoman said: “Australian consumers are savvy and shop across multiple retailers to get the best deal. We will continue to compete vigorously on value to attract and retain customers.”