More people are ditching eating out, food giant says
The country’s second-largest supermarket chain says more Australians are turning to cooking at home rather than eating out as households adjust to rising costs, especially for fuel.
Coles followed Woolworths’ lead by warning that shoppers were facing tougher economic conditions and that tensions in the Middle East were contributing to high commodity input prices.
“We know that value and availability will be important to our customers in the coming months,” CEO Leah Weckert said in a statement Friday.
“We’re well positioned to respond to that.”
Coles reported a 3.1 percent increase in third-quarter sales to $10.7 million; The bulk of this was due to approximately 860 supermarkets generating $9.8 billion in revenue.
Supermarket price inflation, excluding tobacco, fell to 0.8 percent in the three months ending March 29.
This compared with 1.7 percent in the second quarter, reflecting deflation in fresh produce due to abundant supplies in a number of key fruit and vegetable categories.
Inflation in packaged food prices also declined due to increased promotions in non-food categories such as cleaning and baby products.
However, this was partially offset by inflation in red meat prices.
“However, consistent with previous periods, the full impact of increased beef and lamb livestock costs has been partially absorbed as part of our value investment in our customers,” Coles said.
“Our focus is to continue to deliver customers a compelling value proposition that supports their daily needs and to continue to inspire as more customers shift from eating out to cooking at home to help manage their household budgets.”
Rival Woolworths on Thursday warned that confidence among shoppers has fallen since the US attacked Iran on February 28, triggering a Middle East conflict that has driven up the cost of crude oil and petroleum.
Woolworths’ tracking shows 44 per cent of customers are experiencing real budget pressures and are struggling to get by.
Woolworths reported total sales of $18.1 billion for the 13 weeks to April 5, up 4.5 percent on the same period a year earlier.
Much of that was driven by food sales, which rose nearly six percent to $13.8 billion.
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