Wesfarmers half-year mixed bag
The retail giant reported strong results from Bunnings, Kmart and Officeworks, but a decline in earnings from Coles and Target.
Coles and Woolworths have launched a bare-knuckle brawl for shoppers' bread bins.
Coles announced on Wednesday it would slice the prices on several different loaves only for Woolworths to announce swiftly afterwards that it would match the offers on the products where it was not already cheaper.
The price of Coles Bakery Loaves 600g – 680g will drop from $1.90 to $1.80 while 6 pack roll varieties will fall from $2 down to $1.80. It will also drop the price of its banana bread and cake loaves by almost 10 per cent to $5 each.
Branded products will be slashed too, with Tip Top bread varieties including Tip Top Raisin Toast Bread 520g price dropping to $3.50 and Tip Top Café Brioche Fruit Toast 500g dropping to $4, saving customers more than 30 per cent.
The Australian Financial Review reported that the cost of the price cuts for the bread products at Coles would be shared between suppliers and the supermarket chain.
"We know bread is a household staple and always on the shopping list, so we're working hard to lower the price of bread because we know every bit of savings counts at the checkout," Coles General Manager Bakery, Jon Haggett, said.
"We're dropping the price of over 30 varieties of bread to make sure our customers can get great quality bread from our bakeries at affordable prices. These price drops will help Australians save millions per year by shopping at Coles."
Coles chief executive John Durkan signalled at an investor day last month that the giant would push hard on price as it faces a resurgent rival in Woolworths.
Woolworths moved quickly to announce it would match the prices on the products where it was not in front.
"Woolworths is always looking to provide our customers great value when shopping either in their local Woolworths or online, especially when it comes to customers picking up their everyday staples," a spokesman said.
From Thursday, Woolworths will offer the same prices as Coles, such as the Tip Top Raisin Toast 520g at $3.50 and its private label 650 - 680g loaves at $1.80.
Woolworths already offered banana bread at $5. Its mini-bread roll six packs sell for $1.50 and its full size roll packs will now match Coles at $1.80.
Bread is a massive category for the supermarkets with about two-thirds of the $4.7 billion annual spend generated out of supermarket sales, according to Roy Morgan Research. Woolworths and Coles acccount for about a quarter of that spend each - or more than $1 billion.
The move follows a similar price war on eggs which has erupted in the past few weeks with Coles, Woolworths and Aldi all fiercely competing.