Energy and rent rises are worse than food inflation, says Origin and Woolies chair Scott Perkins

Health, education, rent and energy costs are more elevated than food inflation, insists Scott Perkins who chairs both Woolworths and Origin Energy.

Woolworths chairman Scott Perkins has acknowledged the cost-of-living crisis facing Australians as the retail giant faces accusations of price gouging.

The chair of both the nation’s biggest supermarket and energy retailer has conceded Australians are struggling amid a cost-of-living crisis but says soaring food prices aren’t the biggest cause of consumer angst.

Scott Perkins chairs both Woolworths and Origin Energy, with the supermarket retailer bracing for a grilling at Senate hearings as part of an inquiry into the $120bn sector’s prices and market power.

He told an Australian Institute of Company Directors conference on Wednesday that consumers were facing cost pressures in areas other than food.

“I think now the (cost-of-living) pressure is really being felt and it’s not surprising. Interest rates have soared, rents have soared, the cost of energy is still not back to where it was prior to Ukraine crisis,” Mr Perkins said at an AICD conference.

“And when you look at CPI averages, you see that the cost of education, cost of health, cost of accommodation, cost of alcohol and tobacco have all been elevated. In fact, all those categories (are) higher than the cost of food inflation. So customers are really doing it tough.”

The struggle facing Australians presented challenges but also opportunities for Woolworths to look after its customers, he added.

“In order to better look after our customers … we are needing to make our organisations more efficient, more productive, more resilient,” he said. “In the case of Woolies that means billions of dollars into smarter, more efficient supply chains, smarter digital tools, more convenient options for customers to try and reduce their frictions and also delivering great low-price specials, the role of own brands.

“But all of these investments in productivity need to get a return and we are scrutinised for those returns. We are constantly facing that perennial balance between getting all of the interest groups right: shareholders, customers, our team and communities.”

Mr Perkins’ comments come as Woolworths and Coles defend price-gouging accusations, with the duo facing a number of inquiries into price hikes and treatment of suppliers.

The Woolworths chair last week said he was “looking forward” to defending the retailer’s position in the upcoming inquiries and appeared defiant as he addressed criticisms surrounding the supermarket operator’s hefty profits.

“We need to stand up to shareholders and the community and say, well, actually the fact that Woolies is a profitable company, the fact that we think we probably have the world’s leading digital and e-commerce capability, is something to be proud of and not something to be apologetic for.”

The retailer last month posted profits of just under $1bn for the six months to December 31.

The competition regulator, meanwhile, has flagged that it has seen a strong uptick in complaints from consumers about supermarkets and high prices, as well as allegations of “misleading advertising” of prices on groceries.

The supermarket giants have also been accused of pressuring fruit growers to slash their prices so they can cut prices in stores.

The Greens-led Senate inquiry into the supermarkets was earlier this month told that one unnamed supermarket recently boasted to shoppers it was dropping the prices on fruit from $3.50 to $2.50 per bag, but then behind closed doors pressed its fruit suppliers to cut their own prices to fund the promotion.

This had seen suppliers asked to sell their produce for $1 a bag, senators were told in the first public hearings for the inquiry, which represented a significant price cut and which the farmers believed was being used to pay for the supermarket chain to publicise its lower shelf prices.

But Mr Perkins on Wednesday painted a very different picture of the supplier relationship, saying the retailer’s own surveys showed it had improved its relationship with suppliers and that on a sample size of 500 suppliers it was now the No 1 ranked supermarket in areas such as availability and access, ease of doing business, effectiveness of pricing promotions and trust.

He also addressed sustainability concerns, saying Woolies was focused on the areas where it could have an impact.

“We can’t solve everyone’s problems … but the areas of sustainability … the things we have a right to have an informed perspective on, and the expectation of having an impact on, are a reasonably focused set of issues that are important to our customers and teams and consistent with our strategy,” he said.

“You would expect, as one of the largest consumers of energy in the country, we’ve got perspectives on renewable energy. You would expect that given the amount of plastic you see in supermarkets, that we would have a point of view on plastics, the circular economy. You would expect that given the amount of food waste in the supply chain from the farmgate right through to supermarkets … that we have an important seat at the table to try and address that.”