Coles focuses on price, fresh produce and reduced range

Coles Managing Director John Durkan has announced the key areas the grocery giant will focus on over the next year: reducing prices, increasing fresh produce and reducing the range of other grocery items.

Speaking at the Wesfarmers Strategy Briefing Day on Wednesday, Mr Durkan claimed the purpose of reducing certain product lines is to avoid customer confusion, despite recent feedback that one in five customers are unhappy about the current range and availability. Coles refers to this process as “customer-led range simplification”.

“We have moved eight lines out of our garbage-bag category, which was 20 per cent of the items in that category and, in response, sales have increased by five per cent.”

Conversely, Coles intends to increase its fresh-produce range after results from customer feedback indicated that as many as one in six consumers were not satisfied with the current fresh offering. According to the presentation notes, produce sales hit single-digit growth over the past year, and Coles is continuing its investment with suppliers to improve the quality.

The number-one focus for Mr Durkan and Coles, however, is price. The customer feedback survey used in the briefing presentations indicated that one third of Coles customers are unsatisfied with grocery prices.

“It’s already an overpriced grocery market in my view and I’ve been saying that for nine years,” Mr Durkan said. The MD used international grocery prices as a comparison to Australian prices. “I still look at products here that are made overseas and they are crazy prices.”

Coles claims currently to have more than 4,100 products on ‘Every Day’ value prices in stores across the country.

Mr Durkan also says Coles is set to establish 180 new bakeries within stores nationally. “I want Coles to be known for its fresh bread,” he said, during the briefing.