Many families forced to buy cheaper groceries, says Coles’ managing director

MANY Australian families are being forced to trade off fresh food and meat in favour of cheaper groceries during their weekly shop, according to Coles’ managing director.

MANY Australian families are being forced to trade off fresh food and meat in favour of cheaper groceries during their weekly shop, according to Coles managing director John Durkan.

It comes as skyrocketing energy bills and stagnant wages growth crimp household incomes, Mr Durkan said.

CHOICE SUPERMARKET SURVEY CHECKS THE CHEAPEST AND MOST EXPENSIVE GROCERY BASKETS

TOM ELLIOTT: WOOLWORTHS, COLES SHOULD SHELVE HIGH PRICES

Addressing a business forum hosted on Thursday by the American Chamber of Commerce in Australia, he said the mood among consumers was best summarised as “cautious”.

Mr Durkan said it was clear Australians were feeling the impact of rising costs of living and those pressures had been building for years.

“Around the world there has been a rising tide of populism fuelled by a lack of trust in the system as those left behind express concerns through the ballot box about stagnant incomes, widening inequality and disappearing jobs,’’ he said.

“Australia is not immune from these trends. My sense, however, is that they are yet to become entrenched in our country. But there is absolutely no room for complacency.”

Coles managing director John Durkan says the mood among consumers is best summarised as “cautious”. Picture: AAP

Mr Durkan — who tipped an extra $200 million into price cuts for Coles customers over the past six months — noted that over the past few years, wages growth had languished.

“However, at a time when incomes are not growing much, many households are having to confront large price rises in other areas of their everyday living,” he said.

Turning to rising energy prices, Mr Durkan said Australia faced major challenges with its energy policy framework.

“The unfortunate consequence is that consumers (and businesses) will have to bear the brunt of higher prices.”

Coles engaged Nera Economic Consulting to undertake an independent analysis of cost-of-living trends.

The main finding was that cost-of-living pressures had grown across all regions, but more so in some regional areas and within particular states including Victoria.

Mr Durkan said his feedback that was there were many households being forced to sacrifice buying fresh food, instead opting for cheaper packaged food. “There is a sizeable proportion of consumers who are being forced to devote time and effort each week to work out how they can afford to buy the essential groceries they need to feed their families.’

“At Coles we are seeing shifts in consumption from premium to mid-tier products, and, for many, shifts to our value range of products.’’