Battle of the brands as supermarket competition heats up

The price wars might be over, but the brand wars are just heating up as supermarkets battle for the customer dollar - and prepare to contend with a surprise new player.

Costco is expanding its private label range, Kirkland, and expects its products will be cheaper than Coles and Woolworths equivalents.

The range will cover everything from groceries to cooking oils to dairy products.

Costco is also preparing to open a new warehouse in Melbourne's north in August - the 10th to open in Australia since the discount retail giant arrived a decade ago.

"Costco in Australia will continue to grow," CEO Patrick Noone said.

Australia's traditional big two retailers are preparing for a fight.

Coles's Martine Alipins said the supermarket's private label products stacked up against other big brands.

Private label products now make up about 20 percent of all stock on the shelves at Coles.

"When we bring in a private label product, we have to make sure it is as good, or better than the brand, otherwise it just won't cut it," she said.

Own brand products is also an area of focus for Woolies.

Woolworths's Peter Hathaway said the company was trying to serve up something different to customers , while keeping costs down.

"Our home range is really important to our customers becuase it provides them with a really affordable way to get convenient, tasty, nutritious meals on the table," he said.

The Australian's Eli Greenblatt said the competition from Costco would be good for consumers.

"(Retailers) have to offer better, they have to do better, and that's got to be good for shoppers," he said.