Major Coles move to take on Chemist Warehouse, Bunnings, Amazon after $400 million loss: 'Stood still'
Coles is beefing up one particular section of its supermarket empire to take on rivals that aren't Woolworths or Aldi. Chemist Warehouse, Bunnings and Amazon have been soaking up the health, beauty and household categories while the grocery giants fight it out on food and other essentials.
Coles lost an estimated $400 million to these other rivals in this sector, and it is making some changes to get a bigger piece of that pie. Leanne White has been appointed the supermarket's new general manager for health and home, and she revealed Coles' recent "step change".
'We have all been working with a real supermarket lens on how to execute our offer and potentially have not lifted our eyes enough on the broader market set,' she said.
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'We have also lost sight of the importance of health and home. The reality is we have stood still … we really, really need to lift our eyes.'
The health, beauty and household category is a large sector to tackle.
It includes items like makeup, supplements, cleaning products, and everything in between.
Bunnings and even The Reject Shop became unlikely sellers of household goods like laundry detergent and dishwashing liquid, with their prices often decently lower than Coles and Woolworths.
Meanwhile, there has been no shortage of articles raving about beauty items that have been selling out left, right, and centre at Chemist Warehouse, which has massively expanded its beauty and fragrance ranges.Online Chinese marketplace Temu has also carved out a space in the household sector by selling items for a fraction of the price of Coles and Woolworths.
You can pick up an electric toothbrush from one of the big supermarkets for $25 to $50, depending on whether it's on special. But on Temu, they sell for just over $10.
Coles wants to hop on this bandwagon and has reportedly asked suppliers in the health, beauty and household categories to give the supermarket an inside look at their promotional campaigns up to a year in advance.
White told The Australian that having a much longer view of how these products would be sold to the big players would hopefully give her a "significant opportunity" to grow in this sector.
'By moving towards a 9 to 12 month planning timeline, we create better opportunities for Coles, our suppliers, and ultimately, for our customers," she said.
"Many of our suppliers are already adopting this best-practice approach, with this enhanced planning allowing us to be agile to customer trends.'
These non-supermarket players have raked in roughly $100 million per year over the last four years from the new trio sector, according to analysis produced by Coles.
Woolworths chief Amanda Bardwell admitted earlier this year that it too was facing "increased levels of competition" from the likes of Bunnings, Amazon, and Chemist Warehouse, as Aussies "increasingly" shop at multiple retailers to get the best price.
But Coles believes it could claw back as much as $1 billion in annual sales if it's able to stamp a bigger imprint in the health, beauty, and household categories.
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