Supermarket's Game of Thrones
The AFR reported that Woolworths is planning to cut back on capital spending, freeing up funds so it can drop prices and reduce household food bills while also returning money to shareholders. The article also notes that analysts and investors have been expecting competitive pressures in supermarkets to ease after Woolworth's $1 billion investment in price in 2016 and 2017 and following Coles' demerger from Wesfarmers. In our assessment, the analyst and investor sentiment would be correct, but only if there were no other players in the market. With Aldi, Costco and, soon, Kaufland all competing for their share of the pie - if anything, things will get more heated in the supermarket space.