Coles says food price inflation is easing
Coles chief executive Leah Weckert says fresh produce prices are falling, even as baked goods, grocery items and dairy products remain expensive.
The retailer posted a 5.2 per cent rise in revenues to $41.8 billion in the 12 months to June 30, underpinned by supermarket sales, which rose 6.1 per cent to $36.75 billion. While the increase in sales was largely driven by higher prices, volumes returned to growth in last six months.
The supermarket chain’s results provide a glimpse into cost-of-living pressures, which Ms Weckert said was the most significant issue for customers, particularly young families and those younger than 34. But, she added, the prices of fresh produce and even read meat was falling.
Coles chief executive Leah Weckert says volumes are modestly positive in the year.
“They tell us that they are reducing spends on things like visits to the hairdresser and beauty services, entertainment eating out takeaway and coffees from the cafe are increasingly being seen as treats for a special occasion. As the shift in home consumption occurs, they are looking to the supermarket to help them to do more with their budgets,” Ms Weckert said.
Food price inflation for the 52 weeks reached 6.7 per cent. This eased during the year from 7.4 per cent in the first half to 6 per cent in the second. Coles said there was continued moderation in the fourth quarter to 5.8 per cent.
Analysts expected food sales to rise by 5.7 per cent to $36.6 billion.
Coles’ net profit after tax was $1.1 billion, in line with market expectations. Earnings before interest and tax rose 6.4 per cent to $1.99 billion in the 52 weeks ended June 30, slightly below what analyst were predicting.
The company will pay a final dividend of 30¢ per share,
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