Your next shop will be a lot cheaper as big supermarkets go to war

Woolworths has fired the first shot in a $100 million cost of living trolley land grab. Let the grocery discounting wars begin!

As the supermarket that is perceived to be the most expensive, its chief executive, Amanda Bardwell, had little choice other than to mount a highly visible price-cutting campaign.

How far this plays out in reducing the cost of living pain for Australian shoppers depends in large part on what Coles does next.

Bardwell insists that the two big supermarkets will remain “rational”, thus avoiding a price-cutting slugfest. But investors responded to Woolworths’ discounting announcement on Monday by sending the shares of both supermarkets into the red.

But shoppers certainly will be hoping for a battle, which in turn should deliver bigger and broader discounts.

Woolworths is lowering the cost of about 400 items across its network by an average of about 10 per cent – that’s a $15 saving on a $150 shop (if these products are in the basket).

Supermarket shoppers are a promiscuous bunch, and have become even less loyal because times are tough.

That may sound like a meaningful difference, but given stores carry about 20,000 products, this price reduction is particularly targeted.

That said, the list of items reads like one precisely aimed at the mid- to lower-income families with large smatterings of Woolworths home-brand products in the mix, including chicken schnitzels, yoghurt, bread and rice and bulk-sized bacon, and essentials such as flour and nappies.