New Player Joins Petrol Price War

[Falchoon]

frome drivel.com.au

The IGA supermarket group has hit back at retailing giants Coles and Woolworths, announcing its own petrol discount offer.

But unlike its rivals, which have formed multimillion-dollar alliances with petrol retailers, IGA will offer its customers discounts on petrol purchased at any service station they choose.

IGA's four-cents-a-litre discount offer will be launched in Queensland and northern NSW on Friday and is expected to be offered nationally soon.

It levels the field with the supermarket giants, which control 76 percent of the grocery market.

However, Metcash, the grocery wholesaler that operates IGA supermarkets, will not be able to generate revenue from petrol sales to subsidise the offer.

The long-anticipated IGA move was a response to Coles' foray into petrol retailing in July, when it announced a joint venture with Shell that would link it with 584 service stations nationally by the middle of next year.

Woolworths, trading as Safeway in Victoria, started selling discount fuel seven years ago, but countered the Coles move by announcing a deal with Caltex, bringing 450 stations under its umbrella.

IGA spokesman John Hockings said customers could get discounts of up to eight cents a litre by obtaining a discount of fours cent a litre at one of the big retailers' aligned service stations and then bringing their receipts to an IGA store to double their discount.

"This has been very cost-effective for us in that we haven't had to outlay huge amounts of capital to procure service stations," Mr Hockings said.

Coles Myer said yesterday that it was still committed to its national rollout of Coles Express service stations, for which it paid Shell $94 million this year.

A company spokesman said he believed Coles still had the best fuel and supermarket deal on the market, but welcomed competition.

"The market continues to innovate and in this climate the customers will always be the winners," the spokesman said.

Woolworths spokesman Ian Brown said the IGA offer would not affect his company's petrol deal.

"I think people come to Woolworths and Safeway stores for much stronger reasons than simply the petrol discount," he said.

Independent petrol retailers, who have said they are being squeezed out of the market by the big players' discounts, yesterday applauded the IGA deal.

Independent Petroleum Marketers Association spokesman Arthur Nestor said the move would help independent petrol operators stay in business and would win back customers for IGA supermarkets.

"And they didn't have to pay $94 million for the privilege, did they? Coles shareholders wouldn't be too happy about that," Mr Nestor said.

Unaligned petrol retailer BP yesterday described the IGA announcement as a win-win for customers.

[Turbo6man]

Bottom line is that no matter who you shop with for groceries and/or fuel, nothing is for nothing and the prices on the shelf just go up marginally to compensate ... yeah, I'm a cynic, I know, I've been told before

[Falchoon]

It's not like you have a choice now anyway. You've got to eat and you've got to have petrol for the T (not neccessarily in that order though...).

[Redhawk]

Yes falchoon one must get ones priorities in order. :D :lol:

[ms700]

What about beer? that's damn high on my priority list! :lol:

[Guest Zak]

Hmm lets do the sums,

average cars fill up = 50 litres?

saving from IGA = 4c per

4 x 50 = $2.00

Yeh now that's worths spending a fortune for (eg: paying twice as much for soap powder than you should)

Keep it, and come to think of it, WW and Coles can jam their offer up their A*rse as well, Shell and BP were doing just fine and increasing the quality of their fuel, whats forcing them into a price war going to do (lets cut costs) who will suffer. Our engines.

Buy groceries from grocers and fuel from petrol stations, why do they need to complicate things.

Zak

[Buf-Phoon]

The IGA offer states refund of 4c/L from any fuel outlet ??

What about Woolworths Petrol Plus ? Sounds like an opportunity for a double dip to me.

Zak

BTW the average selling price for soap powder ( Laundry Detergent ?)

has risen only marginally in the past 10 years. Significantly less than CPI over the same period. mmmmmmmmm to be a commodity

[plonky]

I think that'soble of IGA but it doesn't help it in the share of the market.

Woolworths and Coles will effectively become a duopoly of the fuel distribution market. This means that natural competition will fade away as IGA and it's network will not be able to compete where it counts.....it country cities.

Lets face it.

The Shell servo you go to for your Optimax will be rebranded as a Coles Fresh Select and the Woolies Servo will be likewise.

Ampol, Mobil, BP etc will disappear. The independants (that sell the crap blended fuel) will struggle.

Fuel prices won't go down but brand loyalty will be encouraged. At the end of the day the consumer will still pay for what he needs....that is the dictate of a free market.

In saying this I still think DJR will be sponsored by SHELL (woo hoo !!!) as Shell is made up of a number of divisions.....Shell Petroleum, Shell Development (DJR's sponsor and provider of oil technology) and others within the Shell (Royal Dutch?) conglomerate.

[Guest Zak]

Hahaha, I would like to see you double dip, man they would have that loop hole sewn up, and the point wasnt about the price of soap powder itself but rather what you pay for it at IGA compared with one of the 2 powerhouses, I am not in favour with any of them just cant belive anyone would go 2 feet out of their way to save $2. Take my advice, spend the extra and buy Shell Optimax, No I dont work for them but I know an independant chemist that researches their fuel properties.

Zak

[Guest P'cisT]

I think you can go to Safeway/Woolies Plus petrol stations or Shell and use the 4c discount from Safway/Woolies or Coles respectively, but also show your receipt to IGA on Fridays to get another 4c per litre refund.

So in total, you're effectively saving 8c/L.

That's what I heard anyway.