Can Woolworths (ASX:WOW) win its delivery battle against Coles?

The pricing war has just heated up…

| More on:
Coles Woolworths supermarket warA man and a woman line up to race through a supermaket, indicating rivalry between the mangorsupermarket shares

Image source: Getty Images

The Woolworths Group Ltd (ASX: WOW) share price could be a winner as a result of COVID-19. The company’s flourishing online shopping service has been a massive hit with consumers opting for convenience. However, a pricing war with Coles Group Ltd (ASX: COL) looks to intensify as the supermarket giant looks to win market share.

At Monday’s closing bell, Woolworths shares ended the day down 0.33% to $39.50.

Woolworths cuts delivery costs

In a bid to entice consumers in the online shopping scene, Woolworths revealed that it is reducing the delivery fees.

For all orders $50 and over, customers who are signed up to the company’s subscription service will receive free deliveries. Normally, this fee charges up to $15 per delivery depending on the shorter same-day or next-day delivery options.

Woolworths is seeking to retain customers but also bring new shoppers by offering a free 30-day trial of Delivery Unlimited. The service costs $119 for an annual subscription, which is 34% lower than previously advertised. Customers pay month-to-month and can cancel anytime.

In addition, using Delivery Unlimited will collect double everyday reward points with every online shop. These points can be redeemed for credit to use on Woolworths products or converted into Qantas frequent flyer points.

On the other hand, Coles offers a free delivery service on purchases of $250 or more. Although, between Tuesday and Thursday, delivery costs can be as little as $2 depending on spend amount.

Both Woolworths and Coles are fighting for market share as the demand of ‘click and collect’ means significant e-commerce sales. Shopping habits have completely changed as a result of the pandemic.

Woolworths share price summary

It’s been a fantastic year for Woolworths shareholders, with the company’s shares accelerating to new all-time highs. Over the past 12 months, Woolworths shares have pushed 15% higher, mostly coming from year-to-date gains, up 14%.

On valuation grounds, Woolworths commands a market capitalisation of roughly $47.87 billion, with approximately 1.2 billion shares on its books.

Should you invest $1,000 in Woolworths right now?

Before you consider Woolworths, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Woolworths wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

Two women in a 4WD vehicle with Carbon Revolution wheels drive along laughing with one throwing her arms in the air
Consumer Staples & Discretionary Shares

Carbon Revolution (ASX:CBR) share price leaps 17% as sales surge

Key points Carbon Revolution share price exploding, up 17.26% Revenue up by 92.6%, according to quarterly update Wheel sales soared …

Read more »

an arrow with sparks shoots up
Consumer Staples & Discretionary Shares

Why is the Dusk (ASX:DSK) share price firing 15% higher today?

Key points Dusk shares are bouncing off a 3-month low today. Shares are soaring 15% into the green at the …

Read more »

Young girl drinking glass of milk
Consumer Staples & Discretionary Shares

Can the beaten down A2 Milk (ASX:A2M) share price get back to $10?

Key points A2 Milk shares are in a 51% drawdown from January 2020 highs of circa $10 per share. The …

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their ASX shares on the laptop in front of them
Consumer Staples & Discretionary Shares

Could this signal the next big acquisition for Wesfarmers (ASX:WES)?

Key points The Wesfarmers share price is down 5% today There are talks of Wesfarmers setting up a healthcare fund …

Read more »

Jumbo Interactive staffers shaking hands around table agreeing to an acquisition
Consumer Staples & Discretionary Shares

Jumbo Interactive (ASX:JIN) share price leaps 6% on acquisition announcement

Key points Jumbo shares on the move following UK-based acquisition of StarVale Initial consideration of $32.1 million funded by Jumbo’s …

Read more »

A group of people cheer at a blackjack table in a casino
Share Gainers

Why the PointsBet (ASX:PBH) share price is rocketing 9% today

Key points The online gambling market continues to grow West Virginia becomes the third US state to host PointsBet’s online …

Read more »

Woman in office sinking in quicksand into the floor
Consumer Staples & Discretionary Shares

Here’s why the Kogan (ASX:KGN) share price just sank 15%

Key points The Kogan share price fell 15% at market open today to a new 52-week low The drop follows …

Read more »

a happy child dressed in full business suit gives the thumbs up sign while sitting at a desk featuring a piggy bank and a sack of money with a dollar sign on it.
Consumer Staples & Discretionary Shares

Here’s a deep dive into the historical returns of Wesfarmers (ASX:WES) shares

When it comes to ASX blue-chip shares, it doesn’t get too much bluer than Wesfarmers Ltd (ASX: WES). Wesfarmers has been …

Read more »