Amazon Australia is stepping up pressure on Woolworths and Coles by adding food and beverages to its non-food pantry range last month, Amazon Australia is now undercutting Woolworths and Coles by as much as 50 per cent on household staples and quickly capturing a foothold in the market.
Woolworths has said Amazon.com.au was selling food and groceries at lower prices than Australia’s largest supermarket chain on a number of products and in some cases at prices below Woolworths’ purchase price.
Better prices simply reflect better negotiation skills from Amazon Australia and far more leverage. I for one would not want Woolworths of all places representing my brand.
A source at Woolworths believes Amazon Australia might be selling below cost and said that would be inappropriate. Actually in it is none of Woolworths business if Amazon Australia is selling below cost, nor is it if I as an individual, purchase items and sell it below cost. Woolworths need to know when to keep their nose out of things and stop having a winge.
Amazon as a business has a lot more to leverage than a few crappy Woolworths stores, but what Woolworths is going to do is go back to their suppliers and have a cry and threaten to remove the products from their stores. Which of course is just fine with me.
Woolworths said, “Suppliers found to be giving Amazon better terms risk having their brands removed from shelves and replaced with rival brands and private label brands if sales of their products underperform in Woolworths stores.”
Gordon Cairns of the board of Woolworths also indicated that food and grocery suppliers could “cut their own throats” by selling on Amazon and losing control over prices and losing business with the major chains. When you sell to Woolworth’s and Coles trust me you are already losing control over the prices.
What brings traffic to Woolworths stores are the brands, not Woolworths themselves.
Remove the brands, please! I’m wanting to see another Masters Hardware disaster! I promise you, I will never go to a Woolworths to buy their own tragic representation of a product. Woolworths branded foods use cheap quality ingredients, cut corners and often just don’t taste right.
Besides people shop where their favourite brands are at if that just happens to be Amazon so be it, I will also save up to 50% at the same time, and not have to be treated like a criminal as your checkout assistants stare at my every move while processing and paying for my items and the self-service checkouts.
Chet Carter is an IT Professional of 22 years, but has worked with a range of businesses giving him in-depth understanding of many different industries. Chet Carter is a business owner but shares his knowledge and experience through posts like these.