Coles and Woolworths compete over Christmas retail strategies

No one hard launches Christmas earlier than retailers do.

Last year, Aldi kicked things off with a bang. This year, Australia’s two biggest supermarkets – Coles and Woolworths – are promising to bring their best, with a bigger-than-ever range, and a pledge to customers of cheaper items and less time spent slaving away in the kitchen.

It’s become an annual end-of-year tradition for Coles to launch its Christmas range at a long lunch in early October. Canapes, crisp arancini, beef ribs, baked salmon, fresh salads and various iterations of ham were on full display for staff, suppliers, business partners and media invited to this year’s feast.

This year, Woolworths decided to host a launch event of its own. As Coles brand ambassador Curtis Stone carved up legs of ham for guests, Woolies invited media to its Christmas display of roast meats (“carvery corner”), with black forest tarts and carefully constructed gingerbread houses in tow.

If there was any indication of which event you’d rather be at, one could ask Andy Allen. The MasterChef judge co-owns Three Blue Ducks in Sydney’s inner-south suburb of Rosebery, where Woolworths held its event – but Allen himself was in the thick of Coles’ scheduled festivities, in Sydney’s Royal Botanic Garden.

The big-picture themes for both retailers are the same. Cost-of-living pressures are shredding household budgets. People are spreading their shopping across different retailers. Rewards points are being saved and cashed in during silly season.

Value for money never seems to go out of fashion, but there is a new feature stalking the supermarket battleground this Christmas: AI.

Coles is not only trying to win over shoppers – it’s trying to win a piece of your AI-compiled shopping list.

“People are developing a list, and then they pop it into ChatGPT or Gemini and ask it to tell them where to buy each item,” Coles chief executive Leah Weckert said.

Weckert and her team learnt a few key things from some Coles-commissioned consumer research: nearly a third of families are using AI tools to figure out which retailer is selling items at the lowest price. Four in five are happy to use shortcuts to save time at Christmas, as long as taste isn’t compromised.

And showing up on the shopping list as the cheapest option is no joke: more than 200 items in Coles’ Christmas range are priced at $10 or less.

“Our brief was to make Christmas faster and more inexpensive,” Stone told Coles’ guests on Thursday. “We want you to take the credit this year.”

Hokkaido scallops and triple cream brie wrapped in prosciutto are designed for the air fryer. “Spiral ham”, an innovation that emerged out of the US, is partially pre-cut to save on carving time. A beef rib roast has already been slow-cooked for five hours, so all there is left to do is reheat it.

Woolworths is onto the same themes, touting duck fat potatoes with truffle butter and a stuffed rolled pork belly that has been slow-cooked for seven hours, as well as a “festive sausage” for summer barbecuing.

“You get to the end of the year, and actually, people still want it to be easy, so convenience is a big thing,” said Woolworths retail managing director Annette Karantoni.

“It’s both in the way you shop, it’s in the tools that you use to shop, and then it’s actually in the product itself.”

On new product development, Coles has mastered the art of the collab: a team-up with Arnott’s has delivered a Mint Slice trifle. Farmer co-op Norco has made a tiramisu ice cream. A new range of Curtis Stone kitchenware, redeemable with points, includes an air fryer.

“That is exclusive to Coles,” said Weckert. “The more of those innovative, inspirational products we have, the more reasons there are to come and shop at Coles.”

Coles has been consistently on the front foot when it comes to broadening its own-brand range to scoop up more customers. About 35 per cent of Coles’ supermarket sales are from products it developed itself; this proportion rises around Christmas, traditionally the most important time for retailers.

But the supermarket giant has been slow to launch its own AI shopping assistant, and will be stuck playing catch-up to Woolworths, which launched its chatbot, Olive, earlier this year (albeit not without some teething issues).

Shoppers are using AI to plan for holidays, find recipe inspiration and check prices, according to Weckert, who pointed to Walmart’s Sparky, an AI assistant that finds and recommends relevant products and synthesises reviews, as well as Meta’s newly launched Muse, which helps you find and buy items in the chat.

“We have not got an AI tool yet,” said Weckert. “I can’t commit to a date. But we’re actively working on it.”

Customers are also learning quickly when it comes to AI. “If the tools are there for [customers], they will absolutely use them,” said Woolworths’ Karatoni.

“They’re using it to write a list to find where a product is, particularly at Christmas, because it’s not a product you’re normally necessarily looking for.

“I’m really interested to see what Olive does this year.”

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