Woolies, Coles slash store-brand bread to 85¢ in discounting battle

The price of bread in supermarkets is the lowest it has been for years with Coles, Woolworths and Aldi discounting the cost of a 650g store-brand loaf to 85¢.

This equates to about 4¢ per sandwich slice.

Woolworths acted first, cutting the cost of its Homebrand white bread last Thursday. Coles quickly followed suit and dropped the price of its Smart Buy white bread on Friday. Then Aldi on Saturday, dropping its Bakers Life white bread from 99c to 85c.

Woolworths' media spokesman Russell Mahoney said the company was expecting the new price to be very popular with consumers. "It is already a popular item," he said.

George Weston Foods supplies Woolworths' store-brand bread, which is baked in Australia.

Baking Association of Australia executive officer Tony Smith said the cheap cost of supermarket bread came at a cost to Australian bakeries. "Basically it's a disgrace. All they're doing is bastardising the industry. Bakers can't make a loaf for under $1.50," he said.

"It puts the local baker out of business and people out of jobs. Small business doesn't need this at the moment.

"It will affect bakeries all across the country. After the introduction of $1 bread, for instance, there's now three bakers in Bathurst who only make pies and cakes."

For Coles, the 85¢ cost is a further reduction on the $1 price tag on Smart Buy bread from the Coles' "Down Down" campaign in 2011.

Coles communications manager Jasmine Zwiebel said there had not been any supply problems with the discounted Smart Buy bread. "Bread is a staple in Australian households and will always be a popular item on the shopping list. Therefore, we will continue to ensure we have the quantities required to meet customer demand."

Neither Coles nor Woolworths could give a date for the last time they traded bread at this price.

Tom Godfrey, head of media at Choice, said that while 85¢ bread seemed like a good idea, consumers should monitor how much they were paying for their groceries every time they shopped.

"The supermarkets will use items like cheap bread to get consumers through the door, but if they end up charging more across the whole shop, then you don't really make a saving," he said. "The best thing to do is write a list of what you actually want, don't believe the marketing hype, stick to your list and don't over pay."

Mr Godfrey said getting consumers into the supermarket is the primary purpose of these types of discounts. Another possible reason for the bread discounting is the growth of Aldi supermarkets, he said. "Particularly in the eastern states, Aldi is increasing its market share, with more people getting very cheap items from the 1500 product lines they stock," he said.

Mr Godfrey also suggested that consumers should ensure they are getting value for their money. "Price is one thing but you've also got to look at quality of the products," he said.

The price slash is similar to the so-called milk wars in 2011, when Coles cut the price of its store-branded milk and Woolworths followed suit. Many dairy farmers were said to be badly affected financially by having to sell their milk at such a low price to stay competitive.

Clarification: The original version of this story listed the price of Aldi's cheapest loaf at 99c, as was listed on their website. On September 20 Aldi lowered the price of its Baker's Life white bread to 85¢ a loaf. The price change is now reflected on the Aldi website.