Keener pricing and better value has been key to the turnaround of Coles, the Australian retailer, according to its store development and operations director Stuart Machin
Speaking at Retail Week Live 2013 Machin said that at its nadir in 2007 the retailer was suffering from poor quality, poor availability and poor value. But a focus on driving down prices and improving quality has helped Coles achieve its aim of becoming “a supermarket business with the soul of a fresh market”.
Machin told delegates: “We set out a few years ago to really look at our pricing and the first thing we realised was that so many stores had different price architectures.”
Coles introduced state-based pricing to clean up its pricing hierarchy and also launched its Big Red Hand initiative to communicate its pricing proposition to customers. “The Big Red Hand has really captured the imagination of Australians,” said Coles. “You see it [replicated] everywhere.”
After 35 successive years of food price inflation, Coles has experienced price deflation since 2010 following its investment in the area..
The retailer is currently in the process of finalising its next five-year plan which marks the second wave of its transformation. Coles said the plan would be “more about evolution than revolution”.
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