Source : THE AGE NEWS
Australia’s largest supermarket chain says higher prices are already flowing into fresh produce, milk, bread and other staples as the fuel crisis drives up inflation across the economy and, in response, Woolworths says it will freeze prices on 300 items for three months from Friday.
Amanda Bardwell, the chief executive of the $45.5 billion grocery behemoth, said the price freeze was part of the supermarket’s efforts to be more open with its customers about potential price inflation as it was committed to balancing supplier cost pressures with household budgets that are getting squeezed by the rising cost of living.
“We’ve learned from the last inflation cycle. This time, we’ll be more upfront and transparent with our customers about where prices are rising and why,” Bardwell told reporters on Thursday morning.
Most of the items on the company’s price-freeze list are its Woolworths-branded or private label brands, such as Woolworths’ hot roast chicken, bread, a dozen cage-free eggs, sausages, tissues and toilet paper.
“We’ll invest to absorb any extra costs that are agreed with suppliers on these products to make that happen,” Bardwell said.
Australia faced its last significant inflation burst between 2022 and 2023 when the world was hit with severe supply chain bottlenecks, surging energy and food prices as a result of the Ukraine war, and robust consumer demand after the pandemic.
‘We’ve learned from the last inflation cycle. This time, we’ll be more upfront and transparent with our customers about where prices are rising and why.’
Woolworths chief executive Amanda Bardwell
The subsequent surge in grocery prices and competitive discounting to win back consumers by Coles and Woolworths prompted an investigation by Australia’s consumer watchdog and legal action over allegedly fake discounts that were offered by both Woolworths and Coles that is still playing out in Federal Court hearings.
As Bardwell detailed Woolworths’ third-quarter sales results on Thursday, the Australian Competition and Consumer Commission was preparing to deliver its closing remarks in a fortnight-long court case against the grocery giant over sales discounts which it claims were fake. The “Prices Dropped” promotional program at the heart of the dispute was quietly discontinued in December 2024.
The grocery giant said its supermarket sales rose by 5.9 per cent to $13.8 billion in the three months to April 5. E-commerce sales increased 20.2 per cent compared to the previous year, helping to lift the group’s overall third-quarter sales by 4.5 per cent to $18.1 billion.
The supermarket is subject to a wave of cost increase requests from many suppliers who have been hit hard by a double whammy of fuel and fertiliser cost increases, both of which have increased sharply over the past two months or are in short supply. Woolies expects more requests in the coming months, Bardwell said.
“We’re still in the very early stages of these impacts, but we expect the pressures to grow,” she said.
“We do expect to see, unfortunately, prices increase in some products and some categories over the next three to six and possibly 12 months.”
Big W, which has been a consistently underperforming business for the Woolworths group, grew sales by 4.8 per cent.
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Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect via X or email.
