Coles, Woolworths and ALDI expect grocery bills will continue to rise

Cost of living pressures are surging for many Australians and supermarkets have warned there is more pain to come for your weekly grocery bill.

Labor shortages, the cost of raw materials, and the rising cost of fuel and utilities are among the factors impacting the price of groceries.

Speaking at The Australian’s Global Food Forum this week, Coles chief executive Steven Cain said Australia had a labor crisis across many sectors.

“It’s been compounded by what’s going on with Covid and the flu, our absenteeism today is twice normal with Covid and the flu, and the churn rate in most industries is increasing,” he said.

“I was talking to one of our store managers last week and asked him what the greatest challenge was.

“He said it was definitely trying to find the right people with the right skills, but he lost one on the shopfloor who is going to be an $80,000 a year dishwasher.”

Camera IconColes chief executive Steven Cain says Australia is facing a labor crisis. NCA NewsWire/James Gourley Credit: News Corp Australia

Mr Cain said grocery suppliers were also calling for further price hikes. “We have got five times as many requests for price increases as we had last year. Five times,” he said.

A Coles spokesperson told NCA NewsWire on Thursday that the supermarket’s focus was on keeping the costs down for families.

“We appreciate that there are a number of factors driving inflation for all retailers, including increases in the cost of raw materials, energy price rises and freight costs, however there are a number of ways in which we deliver value to customers,” they said .

It includes weekly specials and other offers such as Flybuys points.

“This financial year to date, we have reduced prices on well over 2000 items across our range of more than 20,000 products,” the spokesperson said.

“Customers purchasing their My Weekly Specials items can save an average of $65 on their basket each week.”

Woolworths general manager of fruit and veg Paul Turner said heavy rain and low sunlight in Queensland had led to a reduction in supply and quality of zucchini, beans and broccolini.

Camera IconWoolworths says some products are in short supply due to heavy rain in Queensland. NCA NewsWire/Jeremy Piper Credit: News Corp Australia

It was the same for truss, gourmet, cherry and solanato tomatoes, he added.

“We’re still seeing challenges with lettuce and berry supply, so while the new crops have been planted, it will take a few weeks for stocks to return to more stable levels,” he said.

“Right now apples and citrus are at their peak, and pears and white washed potatoes are in strong supply and great value for our customers.”

Mr Turner said Hass avocado season was now underway and Woolworths had dropped prices on more than 300 winter essentials.

Woolworths has about 5000 different products on special every week.

In May, Woolworths slashed the price of more than 300 winter products until August, including roast pork, soups, and cold and flu medication.

Woolworths also recently introduced more than 650 own brand products to its low price program, including flour, sugar and snacks.

Camera IconALDI insists it is cheaper than its competitors. NCA NewsWire/Paul Jeffers Credit: News Corp Australia

Third quarter results in May showed Woolworths vegetable prices were in inflation, while fruit had remained in slight deflation for the first three months of the year, driven by apple and avocado prices.

Woolworths reported an overall average price inflation of 2.7 per cent.

For the same period, Coles reported inflation of 3.3 per cent.

In ALDI Australia’s 2022 price report, released last month, the company said a basket at ALDI was at least 15.6 per cent cheaper than other supermarkets, meaning an average family could save $1555 a year.

“Our research shows that the majority (88 per cent) of Aussie shoppers are looking at changing their spending in the next year, and that starts with finding the best deals around,” ALDI Australia managing director Oliver Bongardt said in the report.

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