Going up: Inflation set to stay at the checkout

Coles boss Steven Cain warns there’s more inflation pain to come before the end of the year as the country’s biggest supermarket chains acknowledge cost-of-living pressures are crunching consumers in the lead-up to Christmas.

The grocery giant revealed on Wednesday that prices across Coles stores climbed 7.1 per cent in the September quarter, with fresh food prices jumping 8.8 per cent as bakery and fruit prices surged.

Australia’s quarterly CPI print for September released the same morning showed annual inflation has reached its highest level since 1990 at 7.3 per cent. Fruit and vegetable prices have seen a 16.2 per cent increase.

Cain told this masthead the federal budget’s warning of soaring power prices on Tuesday would spook shoppers, many of whom are already changing their habits to ensure their groceries go further. Recent surveys of shoppers showed those on lower incomes were looking to spend less on fresh produce and meat and were trying to minimise their food waste by batch cooking recipes or making meals to freeze, he said.

“Probably the biggest concern [in the budget] were the remarks about energy price increases over the next 18 months – that will obviously worry consumers,” Cain said.

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While the major supermarkets have embarked on widespread ‘price lock’ campaigns to help create some certainty for customers about the price of pantry staples, outside these programs it’s likely more price rises are on the way.

“I’m expecting that this quarter we will see a further increase [in inflation], but I’m expecting that you’ll start to see things moderating in the first quarter of the next calendar year,” Cain said.

As long as there’s not more serious inclement weather, meat and produce prices should start easing next year, he said. However, prices are also dependent on how much energy and fuel a particular sector uses as energy costs continue to climb, he said.