Coles has revealed that the price of its products increased by as much as 4.3 per cent over the last financial year as Australia’s cost of living crisis continues to affect consumers.
Coles posted a net profit of $1.048 billion for the 2021-22 fiscal year, an increase of 4.3 percent from the previous year.
It also posted $39.75 billion in annual revenue, a 2 percent increase from the last fiscal year.
But it was the surge in $1 pasta sales that Coles says shows Australians are struggling with cost-of-living pressures.
The supermarket giant revealed in its financial results on Wednesday that the price of its products and the cost of doing business were negatively affected by inflation in the 2021-22 fiscal year.
The report states that there could be more price increases.
“In July, we have seen higher cost price inflation in agricultural products due to recent flooding, in bakery due to wheat commodity prices, and in packaged foods due to various increases in food costs. the supply chain, including wages, packaging, raw materials and freight,” Coles said. in a report
“According to our suppliers and customers, we are also seeing inflationary pressures impacting our own cost base with rising wages, rent, fuel, supply chain and capital costs.
“Additionally, Covid and the flu have seen rising costs of absenteeism for team members continue to affect the business.”
Coles revealed total supermarket price inflation of 1.7 percent in the last fiscal year.
But in the fourth quarter this inflation increased to 4.3%, which was felt especially in fresh products.
“In the fourth quarter, fresh inflation was 4.7 per cent and was driven by both bakery, reflecting higher wheat prices, and fresh produce, due to flooding in Queensland and NSW affecting the supply, particularly in vines and soft vegetables such as tomatoes, peppers and broccoli. Coles said.
“Raw material, commodity, shipping and fuel costs continued to be the key driver for supplier input cost requests received in the fourth quarter, impacting package inflation.”
The supermarket also admits that cost of living pressures were taking a toll on Australians.
“Our commitment to delivering trusted value remains more important than ever,” said CEO Steven Cain.
“As examples, we are starting to see our customers buying significantly more $1 Coles pasta and our $1 coffee at Coles Express has never been more popular.”
The supermarket giant’s cost of doing business, as a percentage of sales, rose by 50 basis points to 21.4 percent during the latest fiscal year, in part due to underlying cost inflation.
He noted that one of his biggest challenges in today’s market was rising food inflation, which had led to an increasing number of suppliers raising their prices and customers’ “more value-oriented choices” affected by cost-of-living pressures.
But in some worrying news for consumers, Coles said his inflation woes wouldn’t be over anytime soon.
In his outlook for fiscal 2023, Coles said rising inflation and rising interest rates would continue to put pressure on many households.
It also said that inflationary costs, including wages, rent, fuel, supply chain and capital costs, would affect its cost of doing business.
To counter these problems, Cole said he focused on promoting unique initiatives and products that would keep customers shopping at his stores.
“With rising inflation and rising interest rates putting pressure on many households, Coles will continue to focus on delivering trusted value to customers through our differentiated Exclusive to Coles range, our signature spirits brands and our Flybuys loyalty program,” he said.
“We also fixed the price of 1,168 products in supermarkets and online until at least January 31, 2023, and began reducing the price of an additional 500 products.”
Mr. Cain also said his “smarter selling program” would help reduce the inflationary costs of doing business.
“We have delivered the third year of our transformation strategy, including significant growth in our eCommerce operations, along with additional efficiencies from our Smarter Selling program,” he said.
“Continuing headwinds from rising inflation underscore the importance of our Smarter Selling cost reduction program, and the start of commissioning of three of our four Witron automated distribution centers and Witron customer service centers. Ocado in FY24 will allow us to drive future efficiencies while providing an enhanced offering. to inspire customers,” he said.
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