Ritchies CEO Fred Harrison says some supermarket items are up to 10 per cent more expensive

Ritchies supermarkets boss Fred Harrison knew inflation was a real issue for shoppers when he noticed more customers turning to cheaper options.

‘In the last two months or so, you are seeing produce prices up about 9 or 10 per cent within the shopping basket,’ says Ritchies CEO Fred Harrison. Picture: Aaron Francis

The boss of one of the nation’s largest independent supermarket chains, Ritchies, knew rising food prices were starting to hit household budgets when he noticed more customers buying mince meat.

“We are starting to see mince meat sales increase a little, which is a little bit of a sign,” he said.

“What that is telling us is that more your budget-focused people are cooking and eating more spaghetti bolognese, lasagne that kind of thing,” said Ritchies chief executive Fred Harrison.

“Mince meat is usually a cheaper kind of meat, sales are starting to lift and that it is often a telltale sign,” he said after latest figures from the ABS showed that inflation in Australia soaring led by gains in food and groceries.

Data released on Wednesday showed that inflation has accelerated to its fastest pace in over two decades, lifting from 3.5 per cent to a blockbuster 5.1 per cent over the 12 months to March and laying the foundation for a RBA rate hike as early as next week. Consumer prices lifted by 2.1 per cent over the first three months of the year.

Consumers are feeling the pinch at the checkout with meat, fresh produce and packaged groceries prices rises easily eclipsing the more anaemic rise in wages.

Mr Harrison, who runs the Ritchies network of 75 supermarkets and 65 bottle shops across Australia said prices in some food categories like fresh produce had increased up to 10 per cent.

“In the last two months or so you are seeing produce prices up about 9 or 10 per cent within the shopping basket, he said.

“And we are starting to see grocery lines, not every grocery line but some, go anywhere from 3 per cent to 12 per cent higher.

“So you know, it’s probably running every bit in the last few months at around 4 per cent inflation,” Mr Harrison said.

According to the latest inflation for the 12 months to March there were price rises across all food and non-food grocery products in the March quarter, with gains led by categories such as fruit and vegetables up almost 7 per cent for the year, meat and seafood up 6 per cent and breads and cereal up 3 per cent for the year.

Mr Harrison said while some meat prices had risen, it was fresh produce, fruit and vegetables that were gaining the fastest when it came to inflationary pressures across the supermarket aisles.

“Fresh produce is the litmus test of where food pricing is going … and if you have fresh food, produce, in the CPI shopping basket that is going up around 10 per cent that is going to have an enormous impact on the household budget.”

Mr Harrison said the rise and subsequent fall of petrol prices following the federal budget announcement of a cut in fuel excise tax had perhaps given mixed signals to consumers as they work out their household budgets.

Last week Coles chief executive Steven Cain warned a string of interest rate rises on top of strong food and grocery inflation could hurt some households and see them cut back on spending.

Steven Cain said the federal government’s recent announcement in the federal budget of a halving in the fuel excise for six months was a “little bit of good news”, but that “a lot” of costs were still pommeling suppliers and manufacturers to generate ongoing inflationary pressures for businesses and consumer.

Earlier this year Brad Banducci, the boss of the nation’s largest supermarket chain Woolworths, said food inflation was “alive and real”.

Research from investment bank UBS found food prices were accelerating since the start of the year with Woolworths March quarter prices rose 4.3 per cent, a large leap from 1.4 per cent in the previous quarter, while inflation at Coles was up 3.2 per cent against 1 per cent in the second quarter.