Grocely unfair or grocely underestimated?
The winner and the losers of the cost of living crisis…
23 August 2023
- Coles the real winner in the cost of living crisis as revenue growth beats inflation
- 1 in 10 Aussies see grocery bills as their biggest financial stressor
- 1 in 5 Aussies spend up to an hour a day worrying about money
- “Average” inflation data may be grossly underestimating financial stress
Today, data from Coles’ Full Year Report showed that there are some winners in a cost of living crisis, reporting an annual revenue growth (6.1 per cent) that managed to outpace inflation (6 per cent), taking home $1 billion in after tax profits.
Despite the latest Consumer Sentiment reports by NAB and Westpac showing a “deeply pessimistic” outlook and sentiment sitting at recessionary levels, Australians battling to keep up with the rising cost of living are likely driving the supermarket’s success.
In a survey of 1,000+ Australians earlier this year, comparison site Mozo.com.au found that behind mortgage payments (selected by 50 per cent of respondents as the biggest financial stressor in 2023), trips to the supermarket were the biggest burden on the cash flow of Aussie households.
“1 in 10 of those surveyed said grocery bills were the biggest financial stressor for this coming year,” Mozo spokesperson Rachel Wastell said.
“What’s more, 1 in 5 admitted to spending up to an hour a day concerned about their financial situation.”
“However, the survey also showed that eating out and takeaway were top of the list of things households would cut back on to save money,” Wastell said. “This is likely one of the driving reasons behind why supermarkets like Coles are performing so well, despite the rising grocery costs causing significant financial stress.”
The use of “average” inflation data may also be grossly underestimating the real rise in the cost of groceries. Current data from the Australian Bureau of Statistics (ABS) shows “fruit and vegetables” have increased by an average of 1.6 per cent in the year to the June quarter.
However, new data from Deakin University, released today to the ABC shows more volatile movements over the past year. Deakin’s data shows that the cost of avocados have increased by 37 per cent and canned tuna by 25 per cent, while the cost of tomatoes have fallen by 56 per cent and iceberg lettuce by 37 per cent.
“These huge differences in the rising and falling costs of different grocery items could mean that the ABS figure of 1.6 per cent is grossly underestimating how much more Australian families are paying for their weekly grocery shop.”
Mozo commissioned a nationally representative survey via Researchify, of 1,058 Australians, aged 18 years and over, conducted from 2nd to 16th February 2023.