When supermarket chains poach their own market share

Australia’s supermarket sector is a cosy duopoly between Coles and Woolworths, but sometimes you’ll find two stores owned by the same company located right next door to each other. So why does it happen?

Entrance to a Coles Supermarket

Growing up in Geelong there were many examples – the first being two Woolworths supermarkets on Queenscliff Road in Newcomb, Victoria. Only 500 metres separate these two stores, each anchoring a similarly sized shopping centre – the first at Newcomb Central, and the second at Bellarine Village. The latter store was a Franklins store until 2001.

Only 500 metres between two Woolworths supermarkets in Newcomb, Victoria

On the other side of Geelong is a pair of Coles Supermarkets on High Street, Belmont. At the bottom of the hill there is a full-line Coles and Kmart anchored shopping centre, with the supermarket 750 metres down the road in the main shopping strip being a former Bi-Lo outlet, rebranded back in 2006.

Only 750 metres between two Coles supermarkets in Belmont, Victoria

In Melbourne there are some even more extreme examples of co-located supermarkets. On Hampshire Road in Sunshine there are two Woolworths supermarkets across from each other – one in the Woolworths owned ‘Sunshine Marketplace’ shopping complex, and a second store in the ‘Sunshine Plaza’ complex across the road.

Two Woolworths supermarkets next door to each other in Sunshine, Victoria

But the two Coles supermarkets in Coburg are the most extreme example, with only the store carpark separating the two outlets!

Two Coles supermarkets next door to each other in Coburg, Victoria

Located next door to railway station in the main Coburg shopping strip, one of the stores has always been as a Coles, while the other is yet another rebranded Bi-Lo store.

Two Coles supermarkets next door to each other in Coburg, Victoria

So why would a major supermarket chain decide to keep one store open when they already have a second store right next door?

To find the answer, there are two supermarkets on Geelong’s Shannon Avenue provide a perfect explanation. With only 900 metres separating them, the supermarket at the Newtown end is still owned by Woolworths, but the nearby supermarket in Geelong West is now a Coles outlet.

Only 900 metres between two Woolworths supermarkets in Newtown, Victoria

The story starts when Safeway and Woolworths were still separate companies, with each operating a store on Shannon Avenue.

New BWS signage with the old Safeway branding

Both stores continued trading for years, until Woolworths opened a much larger supermarket on nearby Pakington Street in 2008, following much community angst. The northernmost Shannon Avenue store was then closed down, but Coles snatched up the empty building and opened their own supermarket on the site in 2008.

Given their experiences in Geelong West, I’m guessing that for Coles and Woolworths running two adjoining stores for a marginal profit is better than to give up a site (and market share) to the other half of the duopoly!

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28 Responses to “When supermarket chains poach their own market share”

  1. Daniel says:

    There’s another double in Carnegie, a Woolworths on each side of the tracks – the one on the northern side is relatively new, built as part of a redevelopment of the site 7ish years ago. The southern one seems to have been renovated recently, so appears to be staying.

    Presumably they didn’t want Coles to get into the area – and/or they felt the level crossing was enough of a barrier to people getting to a store south of the tracks.

  2. Chris Gordon says:

    Supermarkets close together in different shopping centres? Bah, try Westfield Knox in Wantirna South. It has two Coles supermarkets in the same building on the same floor just around the corner of each other!!

    The directory for the shopping centre calls them Coles-1 and Coles-2. (One being a former Bi-Lo).

    • Somebody says:

      Another similar one is at Watergardens Town Centre in Taylors Lakes – there are two separate Woolworths stores in the one building. Both have always been WW stores too.

      Greensborough Plaza used to have two Coles stores too I think, but they might have closed the surplus one by now.

  3. Matt Julian says:

    At one stage after the Bi-Lo rebrand, there was a Coles and a Coles facing off at either end of the carpark at Sunbury station!

  4. Kevin says:

    There are several Woollies in the Craigieburn area, with more coming. Some were opened before Coles and Aldi even had a presence in the area, operating only in a neighboring suburb many kms away, and even there they are only relatively-recent additions.

    The strategies of Coles and Woolworths are different. Woolworths opens and operates many supermarkets in an area to get in first, whereas Coles waits to open in town centres.

    Also, South Morang/Mill Park has several Woollies I believe.
    538 Plenty Road, Mill Park
    http://goo.gl/maps/Ntr3R

    Westfield Plenty Valley Shopping Centre
    340 McDonalds Rd, Mill Park
    http://goo.gl/maps/xGm95

    342 McDonalds Road, South Morang
    Just across the road from the Westfield PV shopping centre link. So new, it is not on Google Street View.

    Do not reply on the mapping of http://www.woolworths.com.au/wps/wcm/connect/website/tools/store+locator to locate them!

  5. AzN_DJ says:

    You also forgot to mention Clayton – again just as bad as the Coburg example, with just the car park separating them!
    You would imagine it would make sense to somehow combine the stores and make just one bigger store, but that obviously hasn’t happened.

    • Andrew S says:

      The one nearest the station was the original Coles New World supermarket with the one nearest Centre Road a former Venture (Waltons before that?) that became the first World 4 Kids – Coles Myer’s short-lived competition to Toys R Us. Coles hung onto the store making it Bi Lo and it ended up just another Coles like was the case for Coburg.

      If I recall the store had a fire in the Venture days in the 1980’s you could see some burn marks on the outer walls for years later.

    • Bobman says:

      The Clayton one is interesting. The larger of the two used to be Bi-Lo, however the Coles closer to the railway station is fairly run-down and quite small. There’s not much point in having it, but surprisingly some locals will visit both stores.

  6. Andrew S says:

    Occasionally they will re-purpose an old supermarket as a large liquor store retaining it within the company. In Glen Waverley a 1960’s Woolworths operated next to the station with a larger Safeway was in The Glen Shopping Centre which has survived the centre’s 1990’s expansions. Bother were Safeway supermarkets until the smaller ex-Woolworths was converted to Dan Murphy’s. Similarly the old ex-Woolworths on Warrigal Road Oakleigh South became Dan Murphy’s when the larger supermarket opened with Masters a few kilometres up the road.

    Another worth mentioning is Safeway/Woolworths Boronia where the new larger supermarket is located over the railway line after the grade separation project. The old one is again Dan Murphy’s – is is one of (if not the only) ‘Marina Style’ Safeway left in Melbourne with its distinctive arch roof and glass front they used in the late 1960’s and early 70’s in Australia. It is named for an early US Safeway in San Francisco.
    https://www.google.com.au/maps/@-37.8613994,145.2818883,3a,75y,34.17h,86.94t/data=!3m6!1e1!3m4!1su-aCRnAx2Wwu7DiAsYGeFA!2e0!7i13312!8i6656?hl=en

    In Springvale the existing Safeway is a 1970’s refurbished in the 1990’s. Closer to the station was a large L-shaped 1960s ex-Woolworths (previously Rockmans Shopwell Department Store) with variety store at the front and supermarket around the corner and a tall sign seen above the other shops. Both traded until the renovation of the 1970s Safeway. The larger store was then converted into a shopping arcade called Springvale Central.

  7. mich says:

    I am a bit dubious about your statement “… back when Safeways and Woolworths were two separate companies… ”

    The american safeways company came to Australia in the 1960’s and they didn’t last very long before they sold out their business to Woolworths, which was in those days an operator of cheap merchandise stores rather than supermarkets.

    For some reason, it took them about 40 years to get around to re-branding the Safeways supermarkets in Victoria, but throughout the 80’s and 90’s and 00’s the stores were identical to the stores in other states except for the logo on the roof.

    • Max says:

      Australian Safeway Stores was established in 1963 acquired by Woolworths in 1985 – so, it wouldn’t be right say it didn’t last very long. Having said that, the decision to use the Safeway brand in Victoria was due to it’s much higher presence than Woolworths.

      The rebranding exercise which commenced in 2008 to the current Woolworths branding was brought about due to the change in marketing and product strategy, with a stronger focus on private label items, such as the Woolworths Select range. Efficiencies in store planning, branding and marketing were also achieved through the uniform branding.

  8. Andrew says:

    Only one eastern Geelong burb supermarket has a Dan Murphy next door. ‘Nuff said.

  9. Max says:

    Karingal Hub is home to two Woolworths supermarkets. Historically, one was originally a Safeway and one Woolworths back when the centre opened.

    Until 2008, there were two Safeway supermarkets operating within 850m of each other on Doncaster Road, Doncaster East. The Jacksons Court store – opened by Woolworths in 1967 – was closed and refitted as a Dan Murphy’s outlet; while the original Safeway store at Devon Plaza continued on in it’s retro 1980s fitout (which I still believe is still the case today, despite the Woolworths branding out the front).

  10. Bjorn says:

    I’ll add Northcote Plaza, where you can almost see one Coles from the front door of the other. The smaller one next to Kmart was a Bi-Lo until 2006 but has been renovated more recently and no trace of Bi-Lo branding remains.

    Interestingly, both the former Bi-Los in Coburg and Northcote retain their old meat rooms and in Coburg the bakery oven areas, used when a Bi-Lo but not since rebranded as Coles.

    They retain both neighbouring supermarkets to keep the competition (Aldi) out. In Coburg, Moreland Council owns the old Bi-Lo and it was/is designated to be turned into a massive bus terminal. Although Coles makes no money out of it (evidenced by the lack of capital expenditure – if you want no self-serve checkouts, go to Coles on Waterfield St), they hold onto it so Aldi doesn’t move in.

  11. […] week I blogged about supermarket chains poaching their own market share – the duplicated Coles stores in Coburg are just one […]

  12. rachel gilmore says:

    there hasn’t always been a coles at that Coburg location , there were shops there, i know my great great grandfather had a butcher shop there….

  13. Robbie Wales says:

    There is a classic example of two Woolies stores in Shepparton which are not far away from each other. In the Shepparton Marketplace there is a Woolworths store and just little further down Benalla Rd there is a Safeway store.

    The same for Wodonga, there is a Safeway and Woolworths right near each other

  14. Jason says:

    Growing up in Geelong there were many examples – the first being two Woolworths supermarkets on Queenscliff Road in Newcomb, Victoria. Only 500 metres separate these two stores, each anchoring a similarly sized shopping centre – the first at Newcomb Central, and the second at Bellarine Village. The latter store was a Franklins store until 2001.

    From recollection the Bellarine Village one was originally a SSW (Harry Hoopers) store

  15. Jay says:

    The Pakington St Geelong West Woolworths may never have been if there wasn’t some controversy as to how Coles acquired the original Geelong West Woolworths on Shannon Ave site.
    I believe Woolworths (Safeway then) had a lease for that particular store but when the lease was due for renewal it “somehow” was “overlooked” by the person responsible and that the said person may then have started working for Coles…
    So to keep their customers Woolworths obtained the Pakington St Ropeworks site and built a new store.

  16. Jonathan Wilson says:

    In some cases (such as with the former Bi-Lo store at Toowong Village) Wesfarmers has converted/is converting extra Coles stores into one of the newer smaller Bunnings stores. K-Mart is also a use for old Coles stores if there is no existing K-Mart in the area.

    A few examples of duplicated supermarkets in the Brisbane area:
    Woolworths Grand Plaza & Woolworths Westpoint. Likely keeping both stores because of the convenience factor of being able to go to Westpoint without needing to go all the way into Grand Plaza (Grand Plaza already has a Coles and an Aldi so its not for competition reasons)

    Woolworths Richlands & Woolworths Inala. This is definitely for competition reasons as the nearest Coles is much further away at Forrest Lake. Or maybe they are far enough apart to both be viable.

    Woolworths Circle on Cavil & Woolworths Surfers Paradise. No clue why they need 2 stores here, Coles has a store in the area already so its not that (unless its to keep Aldi out)

    Woolworths Pacific Fair & Woolworths Broadbeach. Guessing the Oasis Broadbeach store gets business from people not wanting to go all the way into Pacific Fair.

    Woolworths Robina & Woolworths Robina. This one happened when Robina Town Center had a major upgrade. Woolworths wanted a larger store but the area where Woolworths is located wasn’t being renovated as part of the upgrade so Woolworths instead opened a second store at the other end of the centre.

    Woolworths Victoria Point & Woolworths Victoria Point East. No idea here either, there is already a Coles in the area.

    Capalaba Park & Capalaba Central both have Coles AND Woolworths in the centre and there is an Aldi just over the road. Seems weird to have so many supermarkets in the one place.

    Woolworths Sunnybank Hills & Woolworths Calmvale. Another strange one (Coles alreadty in Sunnybank Hills and Aldi just up the road)

    Coles Garden City & Coles Mt Gravatt. Probably another case of wanting to have the advantage by being the supermarket that is easiest to get to for people not wanting to go all the way into Garden City (which has Coles, Woolworths and Aldi)

    Coles Beenleigh and Coles Mt Warren Park. Again, probably far enough apart to be viable even though they may not look like it when you glance at the map.

    • Nick says:

      There has never been a Bi-Lo at Toowong Village. It has been Coles ever since the centre opened in 1986.

      I think you might have meant Toombul instead?

  17. Lee says:

    I remeber as as a kid going To Coles, the Variety store.
    And sometimes Wollies was right next door
    Fleming and Frankliins were supermarket chains
    The price you paid determined the width of the lanes
    Overnight it seemed
    Coles and Wollies grew
    Variety stores then supermarkets too.
    “We can do fruit” said one to the other
    “and put out of bussiness Vegie, his brother”
    And the press said “The public is sad”
    “Bye green grocer, so sad, too bad
    We kinda liked Con and his mother”
    as we threw in another banana
    Beetroot and apples into the trolley
    Its more convenient than….
    Sorry Con and Molly
    I remember the deli
    I remember the smell
    I remember exoctic labels and cheese that looked like bells
    If you want to get romantic, they came from distant lands to end up right here.
    In my hands.
    Then one day Coles had Honey
    Made from Manuka Bees
    Olives,Sausage
    All types of cheese
    and bought the delis to their knees
    “Its far to much” One Polly cried
    Over white Burgundy and Barra
    Lightly fried
    “They are getting too Big! We got our eye on you!”
    As they choppped the Butcher and fishmonger too.
    Over a round of golf it was also discussed
    Extended hours
    They are a must
    And as I grew They did too
    Corner shops went and Sundays too
    They worked their staff
    7 to 11
    in order to compete with
    Well… you know who.
    Coles to Wollies
    “Feel like a Servo?”
    “Lets take two”
    “I Bags Shell, Leaves Caltex for you”
    “Spoken to the Pollies?”
    “One or two said yes”
    “Take them to dinner and convince the rest”
    “They got to big minister, what do we do?
    I’m a little scared between me and you”
    “Yes minister right away. Yes, draft a bill to say
    “Its All OK”
    “On the phone Betty, cant you see”
    “Sorry Mr Wollie, between you and me
    I rekon make Aldi No.3
    And you have the Grog shops, your Happy
    And we look good
    allowing a competition spree
    Anyway
    who wants to buy a steak Next to a TV?”
    As I get older,
    More cynical too
    Wiser, bolder but only a little
    True
    I wonder who made these variety stores huge
    Wasnt it really me and you?
    And when they are the only shops
    and prices soar and quality drops
    Who’s left with the power to really say Stop?

  18. Mark says:

    In Wodonga for about 10 years both Coles and Woolworths had stores less than a kilometre from each other. Both had outlets in Wodonga Plaza, while having other outlets, almost across the road from each other, in High St.

    In both cases the Plaza ones had been re-branded supermarkets (Bi-Lo and Franklins respectively), and this was the case for roughly 10 years.

    In the last couple of years though the situation has changed slightly, as Wodonga’s CBD is getting a rebuild now the railway line has been moved out of town.

    Woolworths – Wodonga Place shopping centre opened in July 2017, with it was a new Woolworths, on the site of an old Safeway supermarket (the last one to be re-branded as Woolworths in Australia), and the plaza store closed the same day.

    Coles – A similar story to that of Woolworths in that another new shopping complex called Mann Central opened in October 2017, where Coles shifted its High Street store to, almost tripling its size. However the plaza store remains open.

    And they couldn’t keep Aldi out, as in 2007, they themselves opened across from the plaza

  19. Heihachi_73 says:

    Ringwood has three Coles stores and a Woolworths.

    The first one (and the only “true” Coles) is in Ringwood Square, the second is in Eastland (ex Bi-Lo), and the third at Burnt Bridge (ex Bi-Lo) just past Car City. Woolworths is also in Eastland. No “independent” supermarkets in Ringwood though, you have to go to Ringwood East (Supa IGA), Ringwood North (Ritchies IGA) or Heathmont (Supa IGA) for something that the duopoly don’t have (such as Cheese & Onion Thins chips, although I haven’t seen them in around 2 years, Smiths only has Cheese & Onion in crinkle cut which just aren’t the same).

    Going along with Jonathan Wilson’s comment, Ringwood Square closed down its Target store a few years ago (which then moved inside the newly-extended Eastland), with the old site becoming Bunnings.

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