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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. Matt 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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I sold out of Westfield a few years ago because I believe shopping centres will become amusement parks. I think Mr Lowry knows this with all his trust and share shuffling. Now the assumption is that the old real estate saying "position etc etc" is still relevant to retail. Aldi proves that wrong at least in my area. I've seen big internal changes in Woolworths grocery items and stores. They are on the right track as I'm sure Coles will identify. My view is that they have not gone far enough although the digital age brings you emails to identify your purchases and when specials are available. Here's a way out view!Within a short time every home will have not a mail box but a food delivery box that is refrigerated and waiting full of your orders on returning home. Where to from there for real estate??

David Bond

djb I own both Coles and Woolies but would much prefer to shop at Coles. Woolies are too keen to tell you to finalise your shopping and kick you at of their stores 15 - 20 minutes before closing and this especially applies to Big W! I believe some of their staff (especially BigW) need a kick up the rear end! The slogan ''the fresh food people'' is a misnomer. Some of their vegetables are tired and old and still on the shelves. Their meat/steak is nowhere near as good as Coles so I refuse to buy veggies, meat or bread from Woolies. Having said that I will still shop at either but I know what I want and from where and from whom I am prepared to buy it!