‘Picture isn’t a good one’: More price pain expected at the checkout

Frugl’s quarterly report, which tracks the prices of popular grocery products from Coles and Woolworths, estimates that the cost of the average basket for a pensioner is up 15.3 per cent for the year, while empty nesters, who are aged over 60 and have seen their adult children leave home, are seeing a jump of 12.5 per cent on their typical grocery shop.

Frugl chief executive Sean Smith said while the price of fruit and fresh produce dipped over the quarter as stock shortages started to resolve, the macroeconomic factors influencing grocery prices are not going anywhere.

Factors including rising fuel prices, the impact of Russia’s invasion of Ukraine on wheat and pressure on global supply chains will all continue to impact grocery prices.

“The picture, unfortunately, isn’t a good one: we see substantive price rises, and there is no easing on additional input costs,” he said.

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Annual topline inflation was 6.1 per cent in the June quarter, and while fuel and new dwellings had the biggest impact on that figure, food also had an impact with price gains of 2 per cent. Vegetable prices drove the bulk of food price gains, up 7.3 per cent for the three months to June.

Coles and Woolworths have embarked on substantial “price lock” campaigns to bring some stability to grocery baskets. While these could prove handy for consumers, the deals do not cover all product categories, Smith said.

“It is a limited range, you’re not talking about milk and vegetables and bread.”

The major supermarkets increased prices for their own-brand milk products in July to account for higher wholesale costs including a rising farm gate price for milk.

Coles reports its first quarter earnings for 2023 on Wednesday and Woolworths will reveal its numbers on November 3.

Coles shares are down 7.8 per cent year-to-date to $16.51, while Woolworths is 13.4 per cent lower to $33.33 in early trade on Monday.

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