Baby formula is the new front in supermarket price war

Supermarket giant Woolworths has drastically reduced prices on a range of baby products to keep its edge in the price war with Coles. Certain brands of baby wipes, nappies, creams and powders will be discounted as well as the sought after Karicare formula.

Woolworths say the move will save the average family $320 annually. The supermarket chain aims to attract families, noting that baby essential items are one of the main reasons customers go to the supermarket. Families are a cherished target market, as they tend to shop for everything in one place.

However the price reduction is the latest in a series of price cut wars between Coles and Woolworths. The two supermarket chains have been engaged in a price war across different product categories, the latest (and arguably most prominent) of which has been the long running milk price battle. The price war has been exacerbated by German supermarket Aldi’s increased market share and improved consumer confidence.

However, cheap prices are not the only thing driving sales in supermarkets. Customer choice is becoming more influential in the supermarket price war, as can be seen in the recent call for consumers to boycott homebrand milk at both Coles and Woolworths. Supermarket chain Aldi has also recently decided to phase out caged eggs altogether due to pressure from consumers. Instead of going for a bandaid solution of price reduction, supermarkets must also consider influences that drive consumer selections, such as ethics.