Aldi Price War Analysis

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http://www.smh.com.au/business/retail/coles-woolworths-aldi-price-war-gets-personal-with-cutprice-tissues-and-toothpaste-20160303-gn9m2e.html

The main issue present in the news story
In this article ‘Coles, Woolworths, Aldi price war gets personal with cut-price tissues and toothpaste’, Catie Low indicated that there is a ‘price war’ between Woolworths and Coles.
As is known to all, Woolworths and Coles are the two big supermarkets in Australia and plays a very important influence for the Australian economy.
According to the article, the price cuts were not reflected in Woolworths' half year comparable sales, which fell back 0.8 per cents in the six months to January 3, however, it's understood the chain has been grappling with ticketing
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As it has already mentioned in the news, that for continuing the price war, ‘they have clearly suppliers support to do this’, which means as the price getting lower, one of the supermarkets will face more consumers to come and buy, therefore they will need more products to satisfy consumers. Therefore, it increases the need of the products from suppliers. So suppliers is another stakeholder.

Competitors
This price war can also cause some negative influences to other competitors. Due to the price war may help Woolworth and Coles to attract more consumers, and therefore less customers will go to other stores. however, as Aldi is growing rapidly, this leads to consumers going towards alternatives and therefore leading the bigger retail services to lower their prices so that consumers can continue to buy from them.

Consumers
Due to the price war between the Woolworth and Coles, consumers can be argued as one of the major stakeholders in this issue. Because no matter the price cut happened in Woolworth or Coles, the fact is that consumers can buy many products with cheaper prices than ever before. Such as Coles’ everyday value strategy helped consumers to save a lot. Hence, consumer in one of the major
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But, if they still dropping the prices, it will result in other competitors can not enter the Australian market, they don’t have the lower cost of the product, consumer will not going to buy an expensive product in the small retail store but in either Woolworths and Coles only half prices.
Woolworths said they had been cheaper than Coles for more than six months, and Coles merchandising director said they will continue to dropping the prices on the popular products. The price war will make either Woolworths and Coles decrease more profit.
Moreover, if Woolworths and Coles follow blindly the price war to comparing the prices, neglect the quality of the product, it will cause the big problem and affect consumer’s impression of them.

References
Low, C 2016 ‘Coles, Woolworths, Aldi price war gets personal with cut-price tissues and toothpaste’, Sydney Morning Herald, 4 March, viewed 14 April 2016, http://www.smh.com.au/business/retail/coles-woolworths-aldi-price-war-gets-personal-with-cutprice-tissues-and-toothpaste-20160303-gn9m2e.html#ixzz45z5XPYCu
Singline, P. 2010, Coles: The Natural Food Brand?, Truly Deeply, viewed 14 April 2016, http://www.trulydeeply.com.au/brand-communications/coles-the-natural-food-brand/
Chris Pash, 2015, MOODY'S: How Aldi is about to steal market share from Woolworths and Coles, viewed 14 April

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