Competition from Aldi pushes grocery prices down

THERE'S more good news for Gladstone shoppers with figures showing Coles and Woolworths are slashing the price of private label groceries to counter the growing threat from Aldi.

Aldi is set to open a supermarket in Gladstone, with the project being approved by Gladstone Regional Council this month.

Brisbane Times reports Deutsche Bank's latest supermarket inflation survey shows private label grocery prices dropped 6.1 per cent in the June quarter.

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It was the sharpest fall in more than 18 months, as Woolworths and Coles sought to narrow a 30 per cent price gap with Aldi, which sells mainly private label goods.

Prices for branded groceries rose 1.3 per cent in the June quarter, despite escalating competition between the large supermarket chains and independent retailers, although the rate of growth was less than half that in the March quarter (2.8 per cent).

"If you think about where the overlap is with Aldi, they have to make sure their pricing is reasonably sharp," Deutsche Bank analyst Michael Simotas said.

"The shopper going into Aldi is a shopper who cares mostly about price - what brings them through the door is a focus on value. By sharpening their private label pricing, Coles and Woolworths are hoping to stem that loss of customers."

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IGA also has announced its intention to match prices on hundreds of everyday items such as breakfast cereals, coffee and pasta.

White's IGA store owner ROz White said the Price Match initiative would enable Gladstone region customers to shop locally without having to pay more.