ParknShop turned up the heat in the supermarket price war yesterday by launching a holiday promotion that it claimed would pass on up to $100 million in savings to its customers in the next two months.
However, its main rival Wellcome said it would not respond to the latest round of price cuts because they already had big markdowns in place.
ParknShop's cuts, which managing director Ian Pye said would include reductions of more than 50 per cent compared to the middle of last year, would continue until Chinese New Year at the end of January. CRC also responded by saying it had already been offering hundreds of items at big reductions.
The latest cuts come after ParknShop sparked a pork price battle in May, with prices slashed by up to 35 per cent. It also introduced a $9.90 charge for rice boxes, and recently gave senior citizens a 10 per cent discount on their bills.
'We are just responding to the needs of our customers during deflationary times,' Mr Pye said.
The Consumer Council has previously pointed out that in spite of the price wars supermarket prices overall had risen by almost four per cent in the past two years. This came at a time when the consumer price index for food had dropped 2.6 per cent in the same period.
Mr Pye said that in the new cuts, hundreds of items would be marked down. He rejected suggestions that ParknShop was triggering unhealthy competition among supermarket operators.
