Two of the major supermarkets could be weeks away from unleashing price hikes for shoppers, in a move that has been months in the making.
Two of Australia’s largest supermarkets are likely to implement sweeping price hikes within weeks, despite many shoppers already experiencing cost of living pressures.
As reported by the AustralianColes and Woolworths will be forced to increase prices in response to requests from suppliers.
If we measure household inflation, the figure rose 2.1 percent, representing a 5.1 percent year-on-year increase. The largest quarterly increases were reflected in fuel (11 percent), with supermarket foods up 4 percent.
During negotiation processes, supermarkets have a 30-day period to review price increase requests, with Woolworths also implementing a policy that seeks “notification of a nominated effective date for a price increase of 10 to 12 weeks”.
Recently, Coles CEO Steven Cain said the company had received “five times as many requests for price increases as last year”. He credited the requests on factors such as the labor crisis, the cost of raw materials and the rising cost of fuel and utilities.
As a result, Coles reported 3.3 percent price inflation for the third quarter, while Woolworths reported 2.7 percent.
Despite attempts by the Reserve Bank of Australia to suppress inflation by raising official cash rates, the CPI is expected to rise again once the results are announced in late July and September.
While the target rate is set at 2 to 3 percent, Reserve Bank governor Philip Lowe feared it could rise to a 32-year high of 7 percent.
In late June, treasurer Jim Chalmers said he expected inflation to be “significantly higher” than expected, although the current level is at the highest level since 2001.
“Inflation will be significantly higher than what was expected in the most recent government budget — which was also expected at election time,” he told ABC’s Insiders.
“Certainly higher than the 5.1 percent we saw in the March quarter. This inflation problem will become more difficult.
“We will do the work between now and July to give people the most accurate assessment of where we think this inflation challenge is headed.”
Meanwhile, the RBA is expected to raise official cash rates again on Tuesday, with experts forecasting another rise of another 50 basis points. This would bring interest rates to 1.35 percent, at levels not seen since 2019.
Originally published as Date Coles and Woolworths, prices are likely to rise as inflation rises