The Supermarket War: Woolies vs Wesfarmers

Buy Hold Sell

Livewire Markets

The fight for supremacy in Australia's supermarkets is a battle that's raged for many years and market cycles, since long before Coles was part of Wesfarmers. Matthew Haupt from Wilson Asset Management and Vince Pezzullo from Perpetual share their view on these two ASX giants.

After five years with Coles as the top, things have taken a turn in the last 12 months as Woolworths has regained its mojo under the management of CEO, Brad Banducci. So, has the easy money been made, or is there room left to run for Woolworths? What about its arch-rival Coles, and the dark-horse, Aldi? We get answers to all these questions in this week's Thematic Discussion.

Key points:

  • 'Last mile' positioning of stores is the key differentiator. As in real estate, it's 'location, location, location'.
  • High margins can look attractive, but they're attractive to competitors too and can drive competition.
  • Woolworths has the lowest-cost logistics network and the best locations.
  • Brad Banducci has brought discipline to operations
  • Coles need to find another way to compete other than price
  • Our panelists discuss the risks from Aldi and Amazon.

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Buy Hold Sell is a weekly video series exclusive to Livewire. In each episode two fund managers give their views 'Buy, Hold or Sell' on five ASX listed companies. Not recommendations, please read the disclaimer and seek advice where appropriate.

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