Coles goes Down Down with hopes of their market share going Up Up
Coles, the supermarket giant has returned to its famous 'Down Down' low price campaign to create greater share price value
What's the key learning?
- Coles is looking likely to start a new price war.
- Whenever Coles lowers their prices on a product, Woolworths will likely match it
- The longer the price wars, the better for consumers as it becomes a race to the bottom.
WTF ARE PRICE WARS?
Australia’s second biggest supermarket chain, Coles, has been losing market share to arch rival Woolies.
In a desperate bid to be relevant again, Coles is relaunching the Down Down campaign, where the price of 250 products have been reduced.
Coles' previous Down Down campaign, which started 10 years ago, was a major hit for the company. Our very own Australian Idol, Casey Donovan, lent her voice to the cheesy, irritating but ultimately catchy campaign.
Experts believe the re-introduction of Coles’ Down Down campaign could potentially lead to another supermarket price war with Woolies.
SO, WHAT IS THE KEY LEARNING HERE
There are no guns and grenades, but a price war occurs when one company lowers prices on their products in an attempt to undercut the other. In response, the other competitor lowers their prices and it becomes a race to the bottom.
Ultimately if a price war keeps going for a long time, it means that both companies keep undercutting each other and the ultimate winner is us, the consumers.
In fact, Coles recently dropped the price of its barbecue chicken by $1. Within 24 hours, Woolworths matched it. Ka-ching.