Meanwhile shoppers in Australia are having to pay more for big-brand items
that are being sold for less in overseas markets.
The statements were made by John Durkan, the managing director of Coles
Australia, in his address to attendees at the American Chamber of Commerce
luncheon held in Sydney.
"At a time when incomes are not growing much, many households are having to
confront large price rises in other areas of everyday living," he says.
"This is placing significant pressure on household budgets and... is contributing to cautious consumer spending."
Durkan presented research – commissioned by Coles and conducted by Nera
Economic Consulting – that found 40% of customers could only afford to
spend $150 a week on a family of four.
Rising pressures of electricity and gas prices
Increasing living expenses and lower wage growth were squeezing household
budgets, pressuring families from low socio-economic areas to spend less on healthy foods, according to the research.
"We should be concerned that many households feeling cost of living
pressures are spending less on fresh produce and fresh meat... These households are being forced to trade off healthier
options for their families," he says.
Durkan acknowledged the additional strain placed on households with electricity prices rising by as much as 20% and gas prices by up to 10%.
The sentiments are consistent with a CHOICE survey that found more than 80%
of Australians are concerned about household electricity prices and the
cost of private health insurance.
Brand name products sold at premium
The managing director of Coles again called out big-brand suppliers – including Heinz, Mars and Coca-Cola – for selling their products at a
premium in Australia when compared to the pricing they charge overseas.
"There are still challenges with some suppliers – mostly multinational
companies – who seem happy to charge Australians more for their products
than is the case in overseas grocery markets.
"This is really frustrating to me because often the price differences
relate to the same product made and sourced in the same place. Why should
Australian customers pay more for products like baked beans, coffee and
razor blades, chocolate bars, than customers overseas?"
Durkan says he will keep the pressure on multinational suppliers so that they
"do the right thing by Australian consumers".
He similarly called out big brand suppliers last month, describing
their pricing in Australia as crazy, after a CHOICE supermarket investigation found the price of an
average grocery basket was routinely more expensive at Coles.