Coles has announced big news that will likely transform the way people shop, but it could prove bad news for its struggling rivals.
The supermarket giant announced on Thursday it would open a string of smaller, more convenient stores across the country.
Coles’ boss John Durkan said the supermarket would roll out about 1,000 new stores to meet the growing demand of urban shoppers in high-density areas.
Coles has announced big news that will likely transform the way people shop, but it could prove bad news for its struggling rivals
‘We are developing flexible store blueprints that will allow us to fill network gaps with smaller formats in inner city locations,’ Mr Durkan said.
‘These smaller formats tap into emerging customer trends of healthy eating and increased convenience.’
Queensland University of Technology retail expert Associate Professor Gary Mortimer said Coles was years behind Woolworths.
He said the move was likely an attempt to catch up to Woolworths, which already rolled out smaller Metro stores in Australia’s capital cities.
The retail expert said Coles’ decision to enter the convenience store market would hit competitors hard.
Coles boss John Durkan said the supermarket would roll out about 1,000 new stores to meet the demand of urban shoppers in high-density areas
Professor Mortimer said Coles decision to invest in smaller stores would likely hit IGA the hardest.
‘IGAs are often situated at the bottom of residential towers where most people expect to pay a premium for convenience,’ he told News.com.au.
‘When Coles and Woolworths venture into this smaller format they can offer the convenience and they can replicate their supermarket prices.’
Professor Mortimer said Coles decision to invest in smaller stores would likely hit IGA the hardest
The announcement comes as Coles vowed to make 40 per cent of its products to be homebrand by 2023.
John Durkan announced the news at Wesfarmers strategy day on Thursday, saying it would improve customer choice, rather than limit it.
Both supermarket powerhouses – Coles and Woolworths – have increased their private label ranges in recent years due to competition online.
‘We need to make sure we have the right products with the right quality and right price … we are never going to take away choice,’ Mr Durkan said.