Coles defends massive discounts

The parent company of retailing giant Coles has defended its decision to engage in aggressive price discounting in the liquor and dairy industries, claiming it is part of its move to rebuild the once-battered reputation of the retailer.

Wesfarmers chairman Bob Every told The Australian the group's prime intention had always been to offer value to customers as part of its five-year plan to improve the profitability of the business and win back the loyalty of customers.

In the past two months, Coles has engaged in deep discounting of milk, beer, wine and eggs, prompting other retailers to follow suit and forcing some suppliers such as Foster's to use a provision in the law allowing them to withdraw supply to prevent their products being used as loss-leaders.

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