EGG prices are being smashed and bread costs sliced in a supermarket discounting war.
Coles, Woolworths and Aldi recently dropped the price for a dozen of their own brand free-range eggs by as much as 40c a carton in a scramble to win over shoppers.
Coles on Wednesday also announced price cuts to more than 30 bread varieties.
These include $1.90 savings on various Tip Top fruit loaves, and 10c to 50c reductions for popular Coles Bakery products. Arch rival Woolies reacted swiftly, saying it already had the lower prices for some items but would match others including Tip Top cuts.
Coles bakery general manager Jon Haggett said the price drops would help shoppers collectively save millions of dollars a year nationwide.
"We know bread is a household staple and always on the shopping list, so we're working hard to lower the price because we know every bit of savings count," Mr Haggett said.
Queensland University of Technology retail expert Associate Professor Gary Mortimer said moving to lower everyday-prices for staples gave time-poor shoppers the confidence to consistently budget rather than relying on ad hoc promotions.
Aldi's Lodge Farms free-range eggs are down to as low as $3.69, depending on egg size. Coles and Woolies have reduced their house brand free-range eggs to as low as $3.80 a dozen.
At Woolies, average branded cage-egg prices have also fallen to $3.50, down $1.50, while Aldi's cage-free eggs dropped 40c to $3.49.
Free-range egg sales now account for 40 per cent of grocery store purchases - double that of a decade ago. Victorian Farmers Federation's Tony Nesci criticised the discounting, saying it was a repeat of the $1-a-litre milk campaign, which would squeeze farmers' profit margins and damage the long-term viability of the egg industry.
"It's happened in dairy with $1 milk, it happens routinely in the fruit and vegetable industry, and now it's happening with egg products," Mr Nesci said.
Aldi said it had absorbed the cost of reductions "with no impact on the suppliers".
Woolworths said it had worn its recent free-range egg price reduction rather than passing it on, and was also supporting farmers by bringing branded eggs into its prices-dropped campaign.
Trish Simpson, owner of free-range egg producer Murphy's Crossing, said her Wasleys company increased its price for a dozen eggs by 50c to $5 due to higher grain prices.
"We haven't put our prices up for two years but we had to and now we've got the big boys (supermarkets) having a price war," she said.
"We might also be going into a drought and the big boys aren't doing anyone any favours."