Woolworths, Coles: shoppers seek value and cheaper in season produce

afr.com:

Woolworths chief commercial officer Paul Harker has warned a parliamentary committee on the economy it will be some time before our food systems return to an “even keel” but fresh fruit and vegetable prices are down about 6 per cent from their peak in September and red meat prices are stabilising.

Mr Harker told the committee looking into competition and business formation that supply chains are beginning to recover and global commodities prices are moderating from record highs.

Woolworths said it will be sometime before the food system returns to an even keel. Nine News

At the half-year end in February Woolworths reported that price hike requests from suppliers had increased by about five-fold. On Tuesday Mr Harker said the number of requests is now sitting at two to three times normal levels.

“Fresh fruit and vegetable prices are down about 6 per cent from their peak in September and red meat prices are stabilising. However, it will take a while before our food systems return to an even keel,” he said.

Mr Harker called out dairy as the sector with the biggest price hike increases.

The June quarter CPI will be released on Wednesday and is tipped to fall to 6.2 per cent from 7 per cent year-on-year in the March quarter.

Mr Harker said Woolworths’ EBIT margins over the last 10 years have actually decreased from over 6 per cent to just over 4 per cent. In fiscal 2020 Woolworths reported its EBIT margin was 4.68 per cent and in 2022 it fell to 4.42 per cent, he said.

Similar to Coles, which also gave testimony, Mr Harker said Woolworths is seeing more shoppers move to cheaper home brands on everyday essentials.

Coles head of government and industry relations Vittoria Bon told the committee that consumers are ditching the