A major Australian supermarket chain is ready to tough it against Coles and Woolworths as the major players wage war to lure cash-shy shoppers to their stores.

A major Australian supermarket chain is ready to tough it out against Coles and Woolworths as the two giants wage war to lure cash-shy shoppers to their stores.

Metcash, the parent company of IGA and Foodland, on Monday revealed an 8.9 per cent sales lift for the 12 months to April 30, while net profit jumped 10 per cent.

The company’s boss Doug Jones said Metcash was ready for some heightened competition in the supermarket space as the two major players embark on a price war.

“We absolutely are able to compete with them,” Mr Jones told The Australian.

“We are very clear that our processes of monitoring their (Woolworths and Coles) pricing and adjusting our own will continue to be effective.

“And we’re able to react quickly, and we do, and so we feel confident that we can and do continue to be highly competitive in what we offer our shoppers.”

In its financial results, Metcash said food sales (excluding tobacco) jumped 20 per cent in part due to the company acquiring restaurant, cafes and canteens supplier Super Foods and opening 22 new IGA stores in the year.

The solid sales boost comes as Metcash makes about seven per cent of the supermarket sales in Australia, according to estimates from the Australian Competition and Consumer Commission.

Aldi has nine per cent of the market while Coles has 29 per cent and Woolworths controls about 38 per cent.

Woolworths in May struck the first blow in the new price war by vowing to slash the costs of more than 400 groceries in a $100m move.

It claimed a family that spends $150 on their weekly shop could save about $15 per week when purchasing the discounted products, which include Greek yoghurt, frozen berries, rice, chicken schnitzel and more.

The leading supermarket giant’s play follows Coles outperforming Woolworths in terms of sales growth over recent months.

Coles struck a blow at Woolworths earlier this month when it revealed plans to cut prices on more than 300 items including household staples in part of its latest “Down Down” campaign.

The latest CHOICE quarterly report on supermarket prices across Australia showed Aldi continues to be the cheapest of the major stores while IGA was the most expensive.

In December, the consumer group recorded the prices of 14 common groceries across 104 Coles, Woolworths, IGA and Aldi stores.

CHOICE chief executive Ashley de Silva said Coles and Aldi had both shown price drops over the 12 months to December, while a Woolworths shop had increased in price.

“From March 2024 to December 2024, Aldi’s basket price with specials remained almost unchanged, decreasing by just 0.3 per cent. In March, Aldi’s basket was $51.51, compared to $51.36 in December,” Mr de Silva said.

“The Coles basket with specials cost on average $68.52 in March, compared to $66.84 in December – a 2.5 per cent decrease.

“The Woolworths basket with specials increased by 3.7 per cent, with the price going from $64.93 in the first quarter to $67.34 in the latest quarter.”

Coles and Woolworths were found to be some of the world’s most profitable supermarket businesses in the world.

An Australian Competition and Consumer Commission inquiry also determined some supermarket’s promotions can also make it tricky for customers to judge whether they are getting a good deal.

A final report put forward 20 recommendations, which included greater transparency for suppliers, regulations on promotional practices, and improving competition in the supermarket sector.

Author Credits- James Harrison
Sky news.COM.AU