cutting prices fend off

Wesfarmers boss Richard Goyder has promised to keep cutting prices at Coles to guard against resurgent rival Woolworths.

Mr Goyder said Coles had built a price gap, which it planned to safeguard through being “fleet footed” and “as aggressive as ever” but he said the supermarket business remained committed to its long-term every-day-low-prices strategy

Wesfarmers did not provide any insight on the supermarket’s sales performance in the first few weeks of the second quarter but retail insiders suggest it’s on a similar track to the first quarter and determined not to follow competitors into irrational promotions.

If comparable sales growth slips back in this period, it will make four quarters of weakening sales growth at the supermarket chain and suggest the Woolworths turnaround is accelerating at the expense of its biggest rival.

“What we’re not going to do is deal with short-term market concerns by compromising on what we want to do long term,” Mr Goyder said.

“We want positive comps [comparable store growth] and positive sales momentum … it’s pretty hard to stay at those highs of 3 or 4 per cent … I think investors absolutely understand that.”