Louie Khoury of Louie's Corner Store says Coles Express cheap milk is an attack on corner stores. Picture: KEN ROBERTSON
Corner store owner Louie Khoury won't even bother trying to match Coles' decision to offer milk for $1 a litre at its branded convenience stores.
The company is now offering that price through more than 600 Coles Express outlets nationwide in what is seen as a direct attack on the traditional corner shop - a sector which is already suffering in the crossfire from the supermarket giants' food price war.
Mr Khoury, who owns Louie's Corner Store in Wollongong, said he wouldn't be getting into any sort of price war with Coles.
"We can't match it - impossible," he said.
"I just have to sell my milk at normal prices and sell quality."
Mr Khoury said his business was helped because he had a lot of loyal customers but he had noticed a decline in his milk sales.
He said that not only was Coles hurting small businesses like his, their move to sell milk for $1 a litre would "destroy the farmers as well".
"They have affected our sales but there's nothing I can really do about it," Mr Khoury said.
"We're paying the right price for the milk but they're destroying everything - it's wrong how people are even supporting them."
President of the Queensland Dairyfarmers Organisation, Brian Tessman, called for consumers to boycott the cheap Coles milk and support their local independent corner stores.
"Dairy farmers see that the market has failed and this is yet another urgent example for the ACCC to investigate predatory pricing," Mr Tessman said.
Coles corporate affairs chief Jon Church denied the cuts would pressure convenience stores, saying "the volume of milk and bread sold at Coles Express is very small compared to Coles supermarkets and will not make a material difference to other convenience stores".
"We have aligned prices with supermarkets because customers told us they did not understand why they should pay more for the same product at Coles Express," he said.
"We thought they had a point and so we now offer the same price for these products, whether bought at our convenience stores or supermarkets."
According to a recent report from industry research firm Ibis, Coles and Woolworths have already created tougher trading conditions for traditional convenience stores with cheaper prices at the supermarkets.
"A renewed focus by supermarkets on everyday staple items such as bread and milk, coupled with significant price reductions in these categories, caused further frustration for convenience operators who relied on such goods to attract consumers in the first place," the Ibis report said.