Cheapest online supermarket shopping: Coles Online or Woolworths Homeshop?

Photo by auxesis from Flickr licensed under Creative Commons

Why Woolworths and Coles pricing matters

Supermarket expenses account for about 16% of our annual household expenditure for our family of 4 (2 adults, 2 children excluding mortgage costs). In cash terms, roughly $25,000 per year, and the second highest category of expenditure in the household after childcare. The Australian competition regulator, the ACCC, in an enquiry last year (2008) identified groceries as representing 12-14% of the average household’s after tax income.

The price of supermarket goods year-in year-out therefore has a quite significant impact on household savings.

Whilst there are new entrants coming in like Costco and Aldi the ACCC still considers the market ‘workably competitive’  but notes in its July 2008 report that there are “limited incentives for Coles and Woolworths to compete aggressively on price”.

Online supermarket shopping: checking the pricing of Coles Online versus Woolworths Homeshop

The increasingly sophisticated nature of Coles and Woolworths online shopping operations means you can monitor comparative pricing for the basket of groceries your particular home normally buys.  This is because both online websites enable you to save a ‘shopping basket’ of regular items. You can also see on the sites when goods are ‘on special’.

Unlike physically visiting a supermarket it doesn’t make a lot of difference to an online buyer where the food comes from e.g. you don’t have to understand the store layout and you basically don’t care whether the food has to travel 5 kilometres or 15 kilometres to get to you. So some concerns that have been raised about the limitations of the government’s ‘Grocery Watch’ price monitoring may not apply to online shopping so much.

Basically if you’re willing to recreate your normal shopping basket on “the other supermarket’s website” it’s easy to switch (and in our experience it may take you a couple of hours to do this once you print out your list and re-enter each item).

Who is really cheaper: Coles Online or Woolworths Homeshop?

The results from our household basket of about 54 branded items based on our last 6 months purchases (the absolutely identical item from both supermarket chains that you can find at the bottom of this article) was that although more of the items were slightly cheaper at Woolworths the difference was so marginal  that it’s not worth worrying about (the average item price difference across the two supermarkets was less than 1%).

In the end our 54 item basket came out at $334 at Woolworths and $333 at Coles (see below). However if one takes into account the delivery charges for the two chains (the minimum delivery charge at Woolworths is currently $5 and at Coles it’s $9) it all comes out almost identical again.

Are all online products similarly priced though? 

Despite the list below which suggests an average individual price difference of less than 1% (we’re sure the supermarkets themselves monitor eachother closely which may account for this extremely close pricing) we suspect that not all pricing is so equal.  

Our list was based on absolutely identical products. What we could not easily comparatively price, were goods like own-branded goods, and we’re sure the supermarkets are aware of this in the assumptions they make themselves about organisations like the ACCC trying compare their prices or even many individual shoppers comparing pricing.

In these areas the price differences can be much more marked. For example, Woolworths 3 litre milk is $3.95 where Coles 3 litre milk is $3.16, a 20% difference…

The ACCC’s report tends to bear this out:

“Price competition is strongest on promotions of key value items (which are products known by the supermarkets to be used by consumers to assess value). This is to be expected, given that the pricing of these products is most likely to encourage consumers to change where they buy

You need to check this with your own household basket and we suggest bread, milk, and salad may be where you find some of these more extreme differences (just don’t assume they apply across your whole groceries basket).

Are online supermarket shopping prices more expensive than in-store prices?

 We had heard this so we actually asked Woolworths by email:

“Hi, could you clarify how your Homeshop pricing compares to your in-store pricing? My assumption was that the pricing was the same with the exception of the delivery charge (which reflects your increased costs in terms of the delivery components). However I have been informed that Woolworths has a markup on online items over and above the in-store price. Is that correct? “  

 For what it’s worth this is Woolworths’ response:

“The prices charged online are comparable to that of a metro supermarket. Not all supermarkets charge the same prices in each store for all items, therefore the prices online may differ to that of your local Woolworths supermarket. Homeshop still offers a convenient, high quality and competitively priced service direct to your door. We regularly review our pricing against other online grocery services and generally find we are cheaper on the total basket. “

We have not validated this assertion about identical instore/online pricing (subject to ‘local’ variations) by checking Woolworths dockets versus their online pricing.

However we have looked at Coles docket pricing from our local Coles versus their online operation and there did appear to be some signficant differences (see the Online v Instore column in the table below) with items like bread and butter and pasta and yoghurt between 8% and 18% cheaper in-store than via Coles Online (in fact any items we directly compared, albeit on a small sample, the online pricing was always more expensive).

We’d be interested to hear what you’ve found!

The comparative online pricing for this article from Coles and Woolworths


  Woolworths Coles Cheaper? Coles instore Online v instore
  Huggies Baby Wipes Refill Unscented 240pk    17.26 17.43 -0.98%    
  Huggies Dry Nites Pyjama Pants For Boys 4-7Years 17-30kg 16pk    19.42 17.99 7.36%    
  Huggies Nappies Boys Walker Ultra Dry 13To16kg 64pk *limit of 6 per customer    45.3 41.95 7.40%    
  Burgen Pumpkin Seeds Bread 700g    5.16 4.79 7.17% 4.79 0.00%
  Lawsons Traditional Bread Settlers Grain 800g    5.28 4.89 7.39% 4 18.20%
  Lawsons Traditional Bread White 800g    5.28 4.89 7.39% 4 18.20%
  Tip Top Muffin English 6pk 400g    4.3 3.89 9.53%    
  Tip Top Raisin Toast Bread 520g    4.39 4.39 0.00%    
  Finish Dishwasher Tablets All In One Regular 28ea    16.14 16.3 -0.99% 14.95 8.28%
  Thick & Thirsty Paper Towel White 2Pk    2.89 2.92 -1.04%    
Biscuits, Snacks & Confectionery              
  Arnotts Jatz Crackers 250g    2.9 2.93 -1.03%    
  Arnotts Snack Right Sultana Fruit Slice 250g    4.09 4.13 -0.98%    
  Lindt Lindor Bags Assorted 125g    5.22 6.53 -25.10%    
  Nabisco Captains Table Water Cracker 125g    1.83 1.86 -1.64%    
  The Natural Confectionery Compnay Tncc Natural Snakes 200g    2.82 2.86 -1.42%    
Breakfast Cereal & Muesli Bars              
  Kelloggs Just Right Original 890g    8.62 8.71 -1.04%    
  Sanitarium Weetbix 750g    4.52 4.57 -1.11%    
Canned Foods & Soup              
  Heinz Baked Beans Salt Reduced 220g    1.35 1.36 -0.74%    
  John West Oysters Smoked In Oil 85g    3.22 3.26 -1.24%    
Chilled & Dairy              
  Allowrie Butter Unsalted 250g    2.69 2.89 -7.43% 2.59 10.38%
  Australian Fresh Juice 100% Apple/Mango 2L    6.46 6.53 -1.08%    
  Australian Fresh Juice Apple/Mango 1L    3.98 4.02 -1.01%    
  Bega Cheese Slices Tasty Natural 500g    8.84 9.15 -3.51%    
  Bulla Cream Thickened 300ml    2.32 2.34 -0.86%    
  Bulla Thickened Cream 600ml    3.83 3.87 -1.04%    
  Don Ham Shaved Leg English Baked 250g    6.29 6.27 0.32%    
  Eco Eggs Free Range 10pk 550g    6.92 7 -1.16%    
  Jalna Bio Dynamic Yoghurt Whole Milk 500g    4.08 4.12 -0.98%    
  Jalna Yoghurt Bio Dynamic Whole Milk 1kg    7.18 7.25 -0.97% 6.65 8.28%
  Jalna Yoghurt Strawberry 500g    3.93 3.97 -1.02%    
  Mil Lel Cheese Parmesan 250g    5.82 5.88 -1.03%    
Condiments, Oils, Sauces & Spreads              
  Bertolli Oil Olive Extra Virgin 2L    25.9 26.15 -0.97%    
  Crisco Oil Peanut 750ml    6.35 6.42 -1.10%    
  Masterfoods Mustard Honey Wholegrain 175g    2.9 2.94 -1.38%    
Frozen Food              
  Birds Eye Potato Gems 1kg    4.48 4.52 -0.89%    
  Streets Blue Ribbon Ice Cream Vanilla 2L    6.79 6.86 -1.03%    
Health, Beauty & Personal Use              
  Band-aid Plastic Strips 50ea    4.13 4.17 -0.97%    
  Colgate Toothpaste Sensitive Enamel Protect 110g    8.41 8.68 -3.21%    
  Dove Deodorant Anti Perspirant Roll On 50ml    4.09 4.13 -0.98%    
  Faulding Shaving Cream Tube 75g    2.79 2.78 0.36%    
  Kleenex Facial Tissues Pocket Pack 4ply 6pk    2.9 2.93 -1.03%    
Hot & Cold Beverages              
  Bundaberg Ginger Beer 4 Pack 1500ml    4.64 4.64 0.00% 4.31 7.11%
  Cadbury Bournville Cocoa 125g    2.68 2.71 -1.12%    
  Frantelle Water Spring Natural 1.5L    1.42 1.41 0.70%    
  Pump Water 4×750 ml    7.85 7.94 -1.15%    
International Cooking              
  Pataks Paste Curry Milk Tikka Masala 283g    5.29 5.44 -2.84%    
Newsagency, Stationery & Office              
  Reflex Recycled A4 Paper Ream 1ea    6.99 7.62 -9.01%    
Rice, Noodles, Pasta & Pasta Sauce              
  Barilla Pasta Penne Rigate No 73 490g    2.79 2.82 -1.08% 2.59 8.16%
  Riviana Basmati Rice Long Grain 1kg    4.22 4.26 -0.95% 3.91 8.22%
  Csr Icing Sugar Pure 500g    1.33 1.34 -0.75%    
  Csr Sugar Brown 500g    1.6 1.62 -1.25%    
  Hoyts Bay Leaves 15g    1.27 1.29 -1.57%    
  White Wings Flour Plain 1kg    3.22 3.26 -1.24%    
        avg diff -0.80%    
TOTAL BASKET     334.37 332.87 0.45%    

Posted under savings levels

This post was written by mike on June 14, 2009

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Public beliefs about long term investment returns from different asset classes

Staggering (to me anyway) study out from Gallup a couple of weeks ago about the public’s beliefs about which asset classes offer the best long term investing returns.
When asked “which of the following do you think is the best long term investment?” 34% of the 1000-odd telephone interviews picked savings accounts with 33% picking real estate. Stocks and mutual funds crept in at a lowly 15% (see below).
Beliefs of Americans about investment returns from different asset classes

Beliefs of Americans about investment returns from different asset classes

The thing that has bothered me over the years about investing in low cost equity tracker funds which eliminate all that stock-specific risk and have historically performed far better than any other asset class, is that they seem like such a no-brainer. Surely it is so obvious that everyone can see this with average actively managed fund performing worse than low cost passive vehicles?

And if everyone can see this then isn’t there going to be a whole pile of ‘dumb’ money piling in driving index constituents to ever higher price earnings multiples, whilst ignoring the fundamentals of these stocks? Who’s going to be left to actually look at individual stocks to do the number crunching to really evaluate their value?

Ok, I realize that nobody ever went broke (particularly casinos) by basing their business on the public thinking they were cleverer than the average Joe but still? Admittedly there is also a lot of rubbish quoted out there that makes it look like stocks do not offer good long term returns. One of my pet hates is writers just quoting the index e.g.

“the S&P is back where it was 10 years ago”

and the writer not realizing that, for example, (from Standard and Poors) dividend income has represented roughly 1/3rd of the monthly total return on the S&P 500 since 1926, ranging from a high of 53% during the 1940s to a low of 14% in the 1990s (when investors focused on growth).

But there is also a huge amount of very compelling research identifying long term returns on different asset classes…

It looks like I needn’t have worried about crowd mentality when it comes to trackers looking at this survey though!  Sadly another thing that stands out about the Gallup results is that lower income investors are more likely to view savings accounts as better investments (obviously imposing an inherent ceiling on their growing their personal wealth) although equally oddly higher income investors believe most in investment in real estate!

The study also bears out that  we investors are so into driving by looking into the rear vision mirror … with equities (now that they represent better value) falling in popularity by 15% or so over the last 2 years (the same survey has been carried out since 2003) and bonds and cash which have performed better over the same period (despite the forward inflationary risk with a wall of government debt bearing down on us) becoming much more popular…

Posted under index trackers, investment strategies

This post was written by mike on June 3, 2009

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