Amid political scrutiny over inflation in the food and beverage industry, Australian grocery giant Coles has denied accusations of price gouging. Coles CEO Leah Weckert emphasized the need for profit to support workers, suppliers, and shareholders, stating that the retailer has maintained flat earning margins for several years.
According to Weckert, in the past five years, Coles has made minimal profit per dollar spent by consumers, and the profit has not increased despite the impact of inflation. She highlighted that inflation is a global issue and not unique to Australia.
Following the release of its half-year results, Coles reported an 8.4% drop in underlying profits compared to the previous year. Despite recording 3.7% revenue growth and a 5.1% decrease in total group EBIT, the retailer’s shares saw a 5.48% increase at the time of publication.
Weckert’s statements come in the midst of allegations of price hikes beyond reasonable levels by Coles, Australia’s second-largest grocer. The Australian Competition & Consumer Commission (ACCC) is conducting a year-long investigation into Coles and its competitor Woolworths, focusing on pricing practices and the relationship between wholesale and retail prices.
Coles and Woolworths collectively hold a significant share of the Australian grocery market, with German discounter Aldi controlling just over 10%. The ACCC’s inquiry intends to assess changes in the supermarkets since the last investigation in 2008.
