Australia's retail market super competitive

Retailer Woolworths Ltd. yesterday described its profits on petrol sales as embarrassingly low and said it had no control over the wholesale price of petrol. Australia’s biggest retailer, which has an alliance with Caltex Australia, offers a discount of A$0.4 (US$0.31) per liter of fuel to customers who shop at Woolworths stores. In its sales results, Woolworths said petrol sales rose 13.8% to A$2.5 billion (US$1.95 billion). Chief Executive Michael Luscombe said the company did not have a great influence over wholesale petrol prices because Woolworths was a retailer, not a refiner. Luscombe said Woolworths’ pricing policy was to match the lowest price in a particular region at the pump and then offer its discount to those who shopped with Woolworths. He added that the volume of petrol sold during the December quarter was “very, very strong”. Woolworths had also responded to further discounting of petrol prices by its main competitor Coles Group in December and January with some of its own “above normal” discounts. (January 31, 2007)

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