Aldi warns more price hikes on groceries are ‘inevitable’

Supermarket giant Aldi has warned Aussies need to prepare for their grocery shops to become more expensive, as the cost of living crisis deepens.

Major supermarket chain Aldi has warned grocery prices will “inevitably” continue to rise after the inflation rate surged to 6.1 per cent.

Food and other grocery items have been hit by huge price hikes in recent months, with Aldi customer interactions director Adrian Christie warning further cost increases are yet to come.

Speaking to the Australian Financial Review, Mr Christie assured customers that the retailer would attempt to pass a little of the cost on to customers amid rising inflationary pressure.

“Some grocery prices will inevitably increase in the months ahead, but we want to reinforce our commitment to customers that we will maintain our price leadership relative to our competitors,” he said.

Aldi has said the cost of groceries will inevitably rise. Picture: NCA NewsWire/Paul Jeffers

Grocery costs have risen substantially as people struggle with cost of living pressures.

The 1.8 per cent figure for the June quarter released by the Australian Bureau of Statistics (ABS) on Wednesday morning brings the annual inflation rate to 6.1 per cent, the highest reading since 1990.

Figures from the ABS show price rises have been seen across almost all grocery items in the June quarter, with fruit and vegetables among the hardest hit.

The cost of fruit and vegetables rose a whopping 7.3 per cent from last year and 5.8 per cent from the previous quarter.

The price of meat, seafood, bread and cereal products rose 6.3 per cent, while the cost of non-alcoholic beverages rose 7.9 per cent.

Michael Harvey, senior food retail analyst at Rabobank International, said Aussies would need to prepare for more price rises, but that there was “relief on the horizon”.

Speaking to 3AW’s Ross and Russel, Mr Harvey said there were “global forces at play” impacting the food system.

“That is really what we are seeing at the grocery level here is global forces around supply and demand, geopolitics having an impact on the food system and really leading to high costs of production right across the food chain.

“Unfortunately what we are seeing now is that finding its way through to the consumer. Unfortunately consumers need to probably brace for a little more pain, because we wouldn’t be suggesting we are at peak food inflation just yet.”

However, Mr Harvey did offer a glimmer of hope for those feeling the strain of the rising cost of living.

“The story here for Australian consumers is clearly it’s tough times, you need to tighten your belt … but it is coming in an environment where lots of consumers around the world are really being challenged by this,” he said.

“Fortunately what we are here [in Australia] is very food secure. We are a net exporter of food and there will be relief on the horizon.”

Treasurer reveals shock inflation prediction

Treasurer Jim Chalmers unveiled a shock prediction that the inflation rate will soon hit 7 per cent, while also pouring cold water on fears Australia is heading towards a recession.

As Dr Chalmers prepares to hand down his first economic statement on Thursday, he said voters wanted “real talk” and he wasn’t going to “sugar-coat” the challenges the economy is facing.

Speaking on Channel 7’s Sunrise, host David Koch asked the Treasurer: “Are we headed for an economic recession?”

“That’s not our expectation,’’ the Treasurer replied.

“What I’d like to do is bring people into our confidence to not tiptoe around these issues, including the inflation challenge that you were talking about a moment ago.

“We expect inflation north of 7 per cent by the end of the year, but then we expect it to moderate after that, but there will be a difficult period for many Australians as we try to deal together with these pretty extreme cost of living pressures.”

Yesterday, Dr Chalmers described the 6.1 per cent inflation rate figure as “confronting”.

“We face economic headwinds. We face rising inflation. We face rising interest rates. There are real challenges there, but I’m comfortable that my government has a plan to deal with those challenges,’’ he said.

Dr Chalmers is expected to use Thursday’s economic statement to parliament “to talk more about these challenges and how we are responding”.

“Our economic plan is all about making the economy more resilient, lifting the speed limits on growth and giving Australians more opportunities to get ahead,” he said.