A major Australian supermarket has listened to shopper demand, extending its prize-freeze program with just weeks to go until the original expiry date.
Coles’ ‘Dropped&Locked’ offer was set to end on January 31, but a spokesperson for the supermarket told TND the “incredible response” from shoppers means the program will survive beyond the month.
“Dropped&Locked has received an incredible response and has helped save Australian households millions of dollars since it launched last year,” Coles spokesperson said.
“With cost of living pressures, customers know they can rely on these locked prices at Coles each time they go shopping to help plan and manage their budgets.
“Dropped&Locked will continue beyond 31 January when the first phase of the promotion was scheduled to end. Further details will be provided soon.”
Woolworths’ similar price freeze program expired in November.
The supermarket giants temporarily locked prices on hundreds of items last year as the rising cost of living put shoppers’ budgets to the test.
It has been a rough period for consumers, with the Consumer Price Index sitting at a 30-year high of 7.3 per cent and many mortgage holders staring down the barrel of bigger repayments thanks to interest rate hikes and the end of their fixed-term periods.
However, a new range of products will likely be selected for further price freezes or price reductions to ease the burden for customers, said consumer and retail expert at Queensland University of Technology, Gary Mortimer.
“Obviously supermarkets are very conscious of where consumers, or where families, are spending their shopping dollar,” he said.
“What I expect to see now is products that are more associated with back to school; lunchbox treats, probably seasonal fruit, particularly stone fruit, ice creams – products we normally buy in summer.
“Those types of products will drop down, and then in three months time they’ll revert back and we’ll see maybe winter products go [down], so soups and things like that.”
A Woolworths spokesperson told TND many products on the price freeze program haven’t changed in price since the program ended.
Although they didn’t mention whether a repeat of the price freeze program would happen – it was the first time Woolworths had frozen prices in 97 years – they have reduced the price of summer staples.
“We’ve recently reduced the price of more than 300 summer grocery staples as part of our ‘Prices Dropped’ campaign, delivering millions of dollars in savings across our customer base, on top of the 5000 specials we offer every week,” the Woolworths spokesperson said.
Competition softening prices
Dr Mortimer said while price freezes might be coming to an end at supermarkets, there is still good competition in the sector to keep prices reasonable.
“We’ve still got four major supermarkets operating in Australia, particularly the ultra-competitive Aldi. And supermarkets are certainly vying for hard-earned shoppers dollars,” Dr Mortimer said.
“So they’ll be pulling out all stops with price promotion during this period of competition.”
Aldi has previously stated it will not engage in price freeze programs, confident in being able to offer low prices across its product range, but IGA has engaged in the supermarket wars through price matching.
In October, IGA announced every store in the country will match lower Woolworths and Coles’ prices for more than 600 “essential products”, and larger IGA stores will match the lowest regular shelf price of more than 1400 products.
Unlike Woolworths’ and Coles’ price freezes, IGA’s price match program is permanent, but the items that are price matched will change depending on seasonality.
Prices to keep an eye on
There doesn’t appear to be too many price shocks for grocery shoppers in the first few months of 2023, particularly in the fresh produce section.
South Australia and Western Australia are dealing with ongoing flooding, but other recently flood-hit states like New South Wales and Victoria are largely in the clean-up process.
As a result, fruit, vegetable and meat prices are currently stable.
An iceberg lettuce is below $2 after reaching nearly $12 in some regions last year.
“A lot of the seasonal challenges that were impacting growers seem to have now mitigated, so we’ll see relatively stable fruit and veg prices, [in addition to] relatively stable meat prices,” Dr Mortimer said.
Price hikes that shoppers should watch out for are more likely to be for “dry groceries” such as cereals, detergents and anything that’s processed and imported.
This is due to higher production costs including electricity, water, fuel and insurance.
“Australian families understand that the household costs that they’re encountering, [such as] interest rates going up on loans, fuel costs, electricity costs, those types of costs are also experienced by major retailers and manufacturers,” Dr Mortimer said.
“So processed dry groceries, you’d expect to see continual inflationary pressure, but fresh products, I would think to see somewhat stable if not slightly reduced pricing as 2023 continues.”
