Woolies ‘cautiously optimistic’ for Christmas even as food prices surge

Woolworths boss Brad Banducci says shoppers have returned to doing their weekly grocery shop on weekends, but must now face up to paying more as inflation makes itself felt in every aisle.

The supermarket giant revealed on Thursday that food prices across its Australian supermarkets rose 7.3 per cent in the September quarter, with fresh produce spiking even more as inclement weather and supply chain pressures hit fruit and vegetable producers.

“In the last month or so we’ve started to see Sundays become our major shopping day – which means customers have got far more routine and habit [than during COVID],” Banducci said.

But some of these shoppers have started to make tough choices about what goes in their trolleys, with signs people are trading fresh produce for frozen food, or moving to canned goods and cheaper homebrand items.

The days of the $6 iceberg lettuce might be over, but the supermarket chain is still seeing price rises from producers and supply challenges across its fresh food range, he said.

Challenges with corn and potato crops were also leading to issues with the supply of frozen products, and there have been delays to in-season fruits coming into stores at good prices, meaning consumers have to wait longer than usually for mangoes and cherries.

Banducci made his comments after Woolworths reported a 1.8 per cent rise in group sales to $16.3 billion for the 14 weeks to October 2 – the first quarter of its financial year. But Australian food sales weakened by 0.5 per cent compared with this period last year, when more shoppers were stuck at home due to the pandemic lockdowns.

Inflation continued to accelerate across the quarter, with the average price of food up 7.3 per cent in Australia, and 5.3 per cent higher in New Zealand.

The company did not specify the exact jump in fruit and vegetable prices during the quarter, but said there had been “double-digit” increases in this category.