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Discount wars and Ooshies signal Woolworths resurgence, business columnist argues

Supermarket giant bets on price cuts and collectibles to rebuild reputation after years of political and regulatory pressure

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By LineZotpaper
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Woolworths is staging a comeback by leaning into perpetual discounting and nostalgia-driven collectibles like Ooshies, according to business columnist Elizabeth Knight. Writing in The Age and The Sydney Morning Herald, Knight argues that after years of being "beaten up by politicians and targeted by the consumer regulator," the supermarket giant's renewed focus on price competition is a good first step toward winning back shoppers.

For years, Australia's major supermarkets have faced intense public and political backlash over concerns about pricing, market power, and treatment of suppliers. Woolworths, in particular, has been a frequent target of criticism from politicians and regulator scrutiny from the consumer watchdog. But according to columnist Elizabeth Knight, the company may have found a path back to relevance: aggressive discounting and the return of collectible campaigns such as Ooshies.

Knight's commentary, published across Nine newspapers on Wednesday, frames Woolworths' strategy as a direct response to its battered public image. Instead of relying on loyalty programs or premium ranges, the retailer is engaging in what she describes as "discounting one-upmanship" — a price war with rival Coles that aims to win over cost-conscious consumers.

The return of Ooshies, a line of collectible toys that previously drove significant foot traffic, is a key part of the strategy. The collectibles tap into both nostalgia and family appeal, encouraging repeat visits and larger baskets. Combined with aggressive price cuts on staples, the approach is designed to signal that Woolworths is on the side of the household budget.

"Engaging in discounting one-upmanship is a good start," Knight writes, acknowledging that the supermarket giants remain unpopular but arguing that tangible price relief could begin to rebuild trust.

The broader context is a supermarket sector under sustained pressure. The Australian Competition and Consumer Commission (ACCC) has been examining supermarket pricing practices, with a focus on whether major chains are using market power unfairly. Politicians on both sides have accused the chains of profiteering during a cost-of-living crisis, leading to inquiries and repeated calls for stronger regulation.

While the article presents discounting as a promising turn, it does not suggest that Woolworths is out of the woods. The price wars could raise questions about sustainability — both for the supermarkets' margins and for the suppliers who may be squeezed to fund promotions. There is also the risk that consumers see the discounts as nothing more than an attempt to distract from deeper structural issues.

Neither Woolworths nor Coles responded directly to the column, but both have previously defended their pricing and promotional strategies as competitive and beneficial to shoppers.

Knight does not predict a quick return to public favour, but her analysis suggests that a visible commitment to lower prices may be the most effective response to the criticism the sector faces. Whether the strategy can hold — and whether regulators will accept it as genuine competition rather than another form of market gamesmanship — remains to be seen.

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Analysis

Why This Matters

  • Woolworths' shift toward sustained discounting directly affects Australian households navigating cost-of-living pressures, offering potential relief on grocery bills.
  • The strategy signals a new phase in the Coles-Woolworths rivalry, with implications for suppliers, independent retailers, and the broader competitive landscape.
  • How the ACCC and politicians respond to this pricing strategy will shape future regulation of the supermarket sector.

Background

Australia's supermarket duopoly has faced intense scrutiny since 2023, when a Senate inquiry examined pricing practices and supplier relationships amid soaring food inflation. The ACCC subsequently launched a review into the sector, focusing on whether the major chains were using their market power to harm consumers and suppliers.

Woolworths has been a particular target. Former executives faced questioning over price hikes and profit margins, while the company was criticised for its handling of supplier negotiations. Collectible promotions like Ooshies, which were paused during the pandemic and later revived, became a symbol of the chains' marketing power during economic hardship.

At the same time, discounting has emerged as a key competitive weapon. Both Woolworths and Coles have repeatedly cut prices on staples such as bread, milk, and meat in an effort to attract households watching every dollar. Knight's column suggests that Woolworths is now treating this as a permanent feature rather than a short-term campaign.

Key Perspectives

Woolworths: The company frames its discounting and collectibles as a direct response to consumer demand for value. Executives have argued that competition remains fierce and that pricing decisions are made with shoppers' interests in mind. Coles: As the other major player, Coles faces similar pressures. It has introduced its own price cuts and loyalty offers, creating a dynamic where both chains must match or exceed each other's discounts. Coles has also spoken publicly about the balance between affordability and supplier viability. Critics and regulators: The ACCC and consumer groups warn that discounting can be a double-edged sword. Temporary price cuts can mask longer-term pricing strategies, and promotional costs can be pushed onto suppliers. Some commentators argue that the real issue remains market concentration and the lack of independent competition.

What to Watch

  • Future ACCC findings on supermarket pricing, and whether discounting is treated as pro-competitive or potentially misleading.
  • The duration of the price war — sustained discounts will pressure Woolworths and Coles' margins, and any retreat could be met with renewed political backlash.
  • Quarterly grocery inflation figures, which will indicate whether the discounting is actually translating into lower household bills.
  • Supplier testimony about negotiations and whether promotional costs are being absorbed or passed down the supply chain.

Sources

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Articles published under the Zotpaper byline are synthesized from multiple source publications by our AI editor and reviewed by our editorial process. Each story combines reporting from credible outlets to give readers a balanced, comprehensive view.

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