Money
Coles reveals its yearly earnings, warns of high prices
Australian supermarket giant Coles announces a jump in annual profit but sends a major inflation warning
According to the company’s report, Coles has achieved a $1.05 billion net profit for the 2021-22 financial year, an increase of 4.3 per cent from the previous year.
But the chief executive Steven Cain says some shoppers have switched to buying cheaper products since interest rates began rising in May.
“As examples, we are beginning to see our customers buying significantly more $1 Coles pasta,” Mr Cain said.
He further added, “$1 coffee at its Coles Express stores has never been more popular.”
Other changes in consumer behaviour include moving from fresh to canned vegetables, and from beef to cheaper meats like pork, lamb, and chicken.
Coles states that inflation will continually force the cost of goods to increase.
“We have seen further cost price inflation in produce due to recent flooding, in bakery due to wheat commodity prices, and in packaged groceries due to various supply chain cost increases,” Coles said in a report.
And continued “consistent with our suppliers and customers, we are also seeing inflationary pressures impacting our own cost base. ”
The message delivered by Coles shows that higher prices will put pressure on Australian customers.
And this may mean, the supermarket price-cutting era has passed.
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