Consumers lose interest in Coles price drop campaign

Posted by AFN Staff Writers on 3rd July 2013

The number of consumers who associate Australian supermarket group Coles with low prices has dropped in the last twelve months, according to findings from market research organisation Roy Morgan Research.

According to Roy Morgan, almost 45 per cent of Coles customers believe the supermarket has low prices, which is just two points ahead of Woolworths’ customers.

This is a drop for Coles from 1 in 2 customers in 2012 saying the supermarket had low prices. By comparison, in 2012, 40 per cent of Woolworths customers said that supermarket had low prices.

For the last five years, advertising campaigns from the two supermarket giants have focused on price, and Roy Morgan said this is reflected in the overall increase in association of both Coles and Woolworths with low prices.

“Despite the strong five-year gains overall, still less than half of each supermarket’s customers associate it with low prices,” said Norman Morris, Industry Communications Director for Roy Morgan Research.

‘Down Down’ campaign “losing effectiveness”

Roy Morgan Research said the successful Coles ‘Down Down’ campaign that has aired for three years would have played a considerable part in moving low price perception upwards among their customers. The campaign has been the point of different that allowed Coles to pull ahead of Woolworths for cut-through of low prices, according to Roy Morgan Research.

“But perhaps the effectiveness of the ‘Down Down’ campaign has come to end, with consumers tuning out the message after years of exposure,” said Norman Morris, Industry Communications Director for Roy Morgan. “The latest March 2013 results reveal there is once again only a small gap between Coles and Woolworths customers, primarily due to a decline shown by Coles rather than ground made by Woolworths,” he said.

Aldi wins on price

German-owned discount supermarket Aldi still has by far the strongest association with low prices in the industry, with Roy Morgan Research finding that around 9 in 10 of Aldi’s customers say the supermarket ‘has low prices’.

Coles customers less satisfied

The latest findings from Roy Morgan Research also showed that satisfaction levels for Coles customers was dropping.

“Satisfaction levels amongst Coles customers are similarly trending downward, indicating a strong relationship between satisfaction and perception of low prices,” Mr Morris said. “It remains to be seen whether Coles’ recent advertising campaigns involving promotional competition will have any effect on reversing the ‘one direction’ Coles is heading in,” he said.