Coles ups profit, dividend as food inflation jumps

Supermarket giant Coles has recorded a profit jump and upped its dividend for investors after a year during which everything from wheat commodity prices to widespread flooding put pressure on staple grocery prices.

The retailer revealed a $1.05 billion profit on Tuesday morning off the back of $39.4 billion in revenue.

Sales were up by 3.7 per cent in its supermarkets segment in the last quarter of the year, while liquor was up 1.9 per cent and sales at Coles Express were 1.1 per cent ahead.

Chief executive Steven Cain said the company had seen further cost price inflation in July as the price of raw ingredients, supply chain costs and flowed through to bakery goods, produce and packaged groceries.

Overall inflation at the supermarket was 1.7 per cent for FY22 and 4.3 per cent in the fourth quarter. That quarterly figure is below the 5.9 per cent that the Australian Bureau of Statistics reported for food and non-alcoholic beverages during the quarter.

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“We do recognise that families are under increased pressure from rising prices – we continue to be committed to delivering trusted prices,” Cain said.

However, he pointed to the fact that prices of some products are moderating, with iceberg lettuces retreating from their highs of a couple of months ago.

While fresh produce remains elevated, the business expects conditions to improve slightly in the second half the year.