Major supermarkets Coles, Woolworths set to slash number of products on shelves

How much salt is too much — and is there really a difference between the multitude of brands? That’s the question the bosses of Australia’s two major supermarkets are grappling with as they start to review the number of products they sell in an effort to make shopping easier for customers. Coles chief executive Leah Weckert says it wants to remove product duplication to bring innovation to the shelves, pointing to its range of 13 basic table salts as an example. “We probably don’t need 13 different types (of) salt . . . four or five is probably quite sufficient,” she said last month as Coles detailed its financial results. And it’s not just table salt on the hit-list. For Woolworths boss Amanda Bardwell, the review is targeted at all categories “where we’ve just seen that customers are not needing”. Product expansion has often been seen as critical for supermarkets to keep pace with the growth of rivals Amazon, Costco, Aldi and Chemist Warehouse, or new players into the segment such as Bunnings. The Wesfarmers-owned Bunnings in recent months has been pushing deeper into automotive products after the success of its move into pet goods and cleaning products. Retail expert Gary Mortimer is confident in Coles and Woolworths’ ability to keep market share despite the move to slash its range. “Woolworths and Coles have anywhere between 18,000 to 22,000 products available. You compare that to Aldi which has somewhere around 1800 to 2000, I think there’s sufficient choice there,” he said, adding the products he expects to go will be “fringe lines” and smaller players. “I really think that shoppers won’t even notice the difference (of having less products) and if they do, what they probably will find is that it just makes their shopping choices easier.” But Australian Small Business and Family Enterprise Ombudsman Bruce Billson worries the move would disadvantage small and family-owned suppliers. “This strategy can generate real difficulties for small suppliers that have a specialist, niche and a highly regarded product and they’re just not able to secure shelf space (in) the bigger supermarkets,” he said. “Where’s the incentive for them to innovate, to bring new products, new lines to market that may well be attractive to customers, but something that might not get a foothold in the major supermarket chains. “That’s probably why they’re increasingly turning to independents and other channels to the market.” Major supermarkets also risk losing customers with specific dietary requirements, Mr Billson added. “You’ll find customers with particular preferences either being forced to go with the big players in the big supermarkets, or to look elsewhere,” he said. Among them is Attadale mother-of-two Sophie Doyle. “I don’t eat gluten or dairy so my purchasing is often around the nutritional value of some of those items,” she said. “It does annoy me when the thing that I need from Coles or Woolies is out of stock. Especially with the click-and-collect, they obviously offer substitutions but sometimes substitutions are not worth having . . . we’re quite specific about the particular brand. “Then you do have to go to another shop so I can see from a consumer’s perspective, it is more difficult if they are going to cut down on their range.” Ms Doyle normally orders her click-and-collect grocery shop at Coles out of convenience, but prefers Woolworths’ range of organic meat. During the week, she’ll also visit her local butcher and The Good Grocer for any top-ups. From a business perspective, Ms Doyle — who owns successful baby bag brand Alf the Label — can understand the position Coles and Woolworths are in. “You don’t want to have C-grade stock sitting on your shelves not selling,” she said. Professor Mortimer said the expanded range seen at Coles and Woolworths was an artefact of the COVID-19 pandemic, when customers struggled to get certain food and grocery items, particularly dry goods. “One way supermarkets combated that was (by) bringing on extra brands and extra suppliers to fill that space,” he said. Ms Weckert told The Sunday Times the reduction would not necessarily mean greater shelf space for its private labels. “We’ve largely kept our private label range consistent at about 6000 products for years and years and years now,” she said. “Private label products, just like any other product in our store, has to sell and if it isn’t performing then we usually take it out of the range. “This year, there was over 500 Coles exclusive brand products that we brought into the range but actually the entire Coles brand range stayed at about 6000, which also means we were taking other products out.” Asked which products consumers can expect to see go or get added, Ms Weckert said: “That’s going to vary by category by category and so we’ll be really led by customer data on this of which are the highest selling product, which are the products that we know have really strong loyalty.” Ms Bardwell would also not be drawn on which products or categories Woolworths will target. “It is very much something that is customer-led alongside looking at the efficiencies that we can capture across our end-to-end supply chain,” she said. Professor Mortimer said the move could also mean favourite household brands were more prominent on the shelves. “If you’ve got 20 facings (shelf space) of Coca-Cola and now you can give it 24 facings, it just means you can hold more of those key lines that customers want, less out of stocks and less customer dissatisfaction,” he said. Woolworths in February revealed a $190 million hole in its profit as it copped a multi-million dollar hit in missed food sales following strikes last year. And while rival Coles also delivered a drop in profit for the six months to January, it jumped on the Woolworths strike action to boost its sales. It comes as both supermarket chains are in the midst of trying to rebuild customer trust in the face of regulatory scrutiny and political pressure to reduce food price inflation. Treasury is expected to soon release the competition regulator’s report into the supermarket sector. Analysts at investment bank Macquarie said given this, Woolworths had emphasised its focus on improving the shopping experience for customers, highlighting price perception, trust and product availability. “In particular, the group called out investment in price and promotion, noting it had recently absorbed price increases in some categories such as meat,” they said. Ord Minnett analysts said both major supermarket chains were set for a strong year in the 2026 financial year, with Coles buoyed by the removal of restructuring costs for its distribution centres and Woolworths aided by its first cost-cutting program in recent years.

Major supermarkets Coles, Woolworths set to slash number of products on shelves

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