Woolworths cut prices to attract shoppers

Woolworths may have begun a supermarket price war after it cut prices on thousands of items in a bid to attract customers.

The price deductions come after Coles made a pledge to charge the same for it products regardless of the store location, the Herald Sun reported.

According to Woolworths, its cuts could save an average family about $300 a year.

Greg Foran, director of supermarkets at the firm, told the newspaper that the move was "no gimmick" and insisted that more price cuts would be brought in during the coming months.

At present, breakfast cereals, toothpaste, laundry powder and chocolate biscuits are among the 3,500 packaged grocery products that Woolworths has reduced to bring prices below those of a year ago.

A supermarket price war may encourage shoppers to compare credit cards as their spending power improves. Recent Reserve Bank of Australia figures showed that consumers spent more than $20 billion on credit and charge cards in November, putting the average credit card account balance at $3,196.

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