BUSINESS Quality over quantity
COLES is betting less will deliver more as it unveils a new upmarket small- store format in its latest push for a bigger share of the nation’s grocery spending.
The supermarket heavyweight has opened its first “Coles Local” store, which provides premium food for health- conscious shoppers who are willing to pay for convenience and quality.
In Melbourne’s Surrey Hills, the store is half the size of a regular Coles and carries half the number of goods.
But it stocks 1000 products that are not available in regular stores, including items sourced from speciality suppliers such as pantry items from MoVida, cakes from Brunetti and meats and ready- made meals from Meatsmith, backed by Cutler & Co’s Andrew McConnell.
More than half the floor space is dedicated to fresh foods that are 100 per cent Australian, meaning if a fruit or vegetable is not in season it won’t be on the shelves.
It also sells a new range of Coles Local convenience meals and has a “Foodie Hub” with an in- store chef providing product samples as well as cooking advice and recipes to customers.
The new format is the latest indication that the nature of the supermarket wars is changing as both Coles and Woolworths increasingly focus on convenience and service rather than just price.
“Consumer needs are changing,” new Coles chief Steven Cain said. “We are moving towards convenience and that means convenient stores and convenient products.
“It means different things to different customer groups and we have to supply their demand.”
Coles will monitor the success of the pilot store before deciding how many it will roll out, although other locations in Melbourne and Sydney are under consideration.
Upmarket food offerings on a large scale have previously failed to find financial success. Woolworths pulled the plug on its Thomas Dux gourmet grocery chain last year.
David Jones has dived back into gourmet food and ready- to- eat meals – opening some stand- alone food halls – having blown more than $ 120 million on its Foodchain concept a decade ago.
“This is a high- growth channel wherever you look in the developed world,” Mr Cain said.