Coles and Woolworths could see shoppers hit with price rises of 12 per cent this year

A warning has been issued that price hikes are “coming now and are large” as the major supermarkets grapple with suppliers demanding more money.

Coles and Woolworths’ suppliers are hitting up the major retailers for multiple price rises, which could see the cost of products on shelves increase by a whopping 12 per cent this year, new research has revealed.

Shoppers in the US and UK are already being battered by huge price increases and Aussies are about to experience the same as the cost of living skyrocketed to a 22-year high.

Ben Gilbert, retail analyst at investment bank Jarden, warned price rises at supermarkets are “coming now and are large”.

A survey of 45 suppliers from Jarden found they were seeking a price rise of up to 6.8 per cent each year on average on their products, with 66 per cent already pushing the increase through, while 20 per cent were still in negotiations.

“Price increases are significantly larger than we expected,” Mr Gilbert said in his survey of key retail suppliers.

Prices on supermarket shelves are only going to increase. Picture: Hanna Lassen/Getty Images for Coles

But that isn’t the end of rising food prices either.

“Further increases are planned, either a second or a first at a planned weighted rate of 7.4 per cent. This paints a scenario whereby we could see an annualised run-rate of more than 12 per cent through 2022,” he said.

In more bad news for Australians, Mr Gilbert said special sales or promotions would likely drop.

“Despite retailers and suppliers actively pulling promotions through January, reflecting supply chain issues, not all suppliers are able to concurrently or are planning to reduce promotions,” he said.

“We found 49 per cent expect to reduce promotions, while 11 per cent are unsure.”

Fruits and vegetables are set to be among the items most impacted by price rises with some grocery manufacturers facing up to 700 per cent cost increases.

Shoppers are going to be hard hit this year. Picture: NCA NewsWire/Gaye Gerard

The soaring supermarket costs is another blow to Aussie consumers as they deal with rising interest rates, increased childcare costs and spikes at the petrol pump.

Some groceries at Australia’s major supermarkets have already risen up to a whopping 94 per cent in the past year, data released last month revealed.

Coles has been forced to jack up prices on a range of everyday items and warned shoppers there could be more price pain in the months ahead.

Coles increased prices by 3.3 per cent on average over the March quarter, while Woolworths upped its prices by 2.7 per cent. Picture: NCA NewsWire/James Gourley

The $25 billion retail conglomerate said it increased prices by an average 3.3 per cent over the March quarter to pass on the inflated cost of shipping, fuel, meat, and fresh vegetables, but Coles chief executive Steve Cain said costs could climb further in the months ahead.

Woolworths also flagged a 2.7 per cent rise in shelf prices as its managing director Natalie Davis revealed that 160 out of its top 200 suppliers has requested an increase in the cost of their product, with suppliers expected to ask for a further hike in the next 12 months.

The price hike from both major supermarkets is softer than the 5.3 per cent inflation for grocery products reported by the Australian Bureau of Statistics.