‘All shoppers doing it tough’, supermarket execs tell Senate cost of living committee

Woolworths and Coles have told the Senate select committee on the cost of living that Australian households are struggling and have been forced to change their shopping behaviour.

Supermarket executives have told a Senate cost-of-living committee that even wealthier shoppers are doing it tough and looking for value. Picture: Max Mason-Hubers/NewsWire

Households from affluent to lower socio-economic levels are struggling with cost-of-living pressures, which are forcing them to change their shopping behaviours at the supermarket and eat out at restaurants less to make their budgets stretch further, a Senate committee has been told.

Even wealthy households were feeling the bite of inflation, supermarket executives told the cost-of-living committee on Friday, with well-heeled consumers opting out of going to their favourite restaurant or cafe to save money and instead choosing more expensive or premium foods at the supermarket – such as better cuts of steak or premium ice cream – to still treat themselves at home.

The Senate committee was told the broad base of middle-income households with mortgages were also making cutbacks, as well as renters, travelling further to find discounts and shopping at multiple outlets to get the best deals.

Coles head of public affairs Adam Fitzgibbons told the committee, chaired by Liberal senator Jane Hume, that consumers were “doing it tough and seeking value” when it comes to filling their supermarket trolleys and that Coles was focused on delivering value to customers and cheaper groceries where possible.

He said shoppers were feeling the pinch “across the board” and were looking to save money where they could on their trips to the supermarket.

His comments were mirrored by Woolworths chief commercial officer Paul Harker, who told the committee that cost-of-living pressures were hitting most households, from wealthy shoppers to those in the suburbs.

“The (stores) in more affluent areas, ones in very strong mortgage belts or where people have lower incomes, all customers have displayed a value tendency, it just varies. The more affluent areas, people have cut back on out-of-home consumption, so less restaurants, and coming into a store to maybe buy high-end steaks or premium ice cream. But (there’s) a shift from out-of-home to in-home consumption,” he said.

Mr Harker said the traditional middle or core customer had “made the biggest adjustment in some instances”, typically shopping around more and being prepared to drive further to a particular retailer or discounter.

Mr Harker said in the past year there had been deflation in many fruit, vegetables and meat products at the supermarket, which should be welcomed as these items were core fresh foods, but that the supermarket giant was facing cost-increase pressures from manufacturers and wholesalers of packaged groceries.

He said of the estimated 12,500 items Woolworths stocks, more than half of the packaged ranges had experienced price inflation.

Mr Harker also told the Senate committee that a major concern was rising transport and shipping costs that was flowing through to higher prices for grocery items.

Mr Fitzgibbons said Coles had also witnessed a rise in packaged grocery costs and that in fiscal 2023 there had been a more than a doubling of requests from suppliers to raise prices due to their own surging cost of doing business.

He said Coles was seeing continued inflation in shipping and that was “a concern going forward” not just for the supermarket but across the supply chain, with those inflationary pressures making it “more expensive for Coles to buy goods but also to sell goods”.

At one point in the committee’s public hearings Senator Hume asked the supermarket executives why a packet of Arnott’s Tim Tams in Britain was cheaper on the supermarket shelf than for the same packet of Tim Tams in Australia. The Woolworths and Coles executives stated this type of question should be put to Arnott’s as they were the manufacturers and set the wholesale price.