Coles slammed over excuse for 'preposterous' prices: 'It doesn't make sense'
One consumer expert says it's 'clear' some businesses are 'prioritising shareholders above customers'.
Coles is being called out for repeatedly telling struggling shoppers it "must" raise prices, despite the retailer recording a $1 billion profit in the last financial year.
Meticulously responding to customer complaints on social media, Coles has attempted to justify jacking up the price of many grocery staples, claiming it simply passes on increases that it has incurred from suppliers, but is "reluctant" to do so.
However, consumer and money expert Joel Gibson has told Yahoo News the price rises are "entirely" under Coles' "control" and the supermarket has made the decision to "increase their profit margin".
"How are prices down when you’re actively price gouging and worsening the cost of living crisis within Australia?" a Facebook user asked in response to a post on the Coles 'Hands Down' ad campaign.
Coles says it's 'always reluctant' to increase prices
"While we can’t go into detail about the circumstances surrounding individual product price rises, they are typically driven by price increases that Coles must pass on through higher shelf prices," the supermarket responded.
"Coles is always reluctant to increase prices and will only do so where there are legitimate reasons and having regard to all factors, including the impact on our customers. Coles also absorbs many cost increases to products and services. Product price increases can occur for a variety of reasons including changes to the cost of raw materials or cost of goods, increased operational costs, manufacturing processes, transportation or taxes and duties."
While not disputing the retailer's statement, Joel Gibson said irrespective of wholesale increases the fact of the matter remains that Coles management is solely responsible for its prices.
"I think there's truth to that, that their costs are going up, and that their prices have had to change in response to that somehow, but it's entirely within the control of the management at Coles how much they put those prices up by," Mr Gibson told Yahoo News Australia. "And, how much of the cost increases they absorb, and how much they pass on to shoppers.
"They've obviously made the decision to make sure that their profit margin went up and increased prices to the point where that was possible."
Shoppers echoed Mr Gibson's view, with one responding to Coles' response saying it simply "doesn't make sense".
"I would say that it's less about passing costs onto customers and more about price gouging to cough up additional dividends to those shareholders, and pay for the millions of dollars in executive bonuses," they said.
'Businesses prioritising shareholders over customers'
CEOs of these big companies are always "spinning three plates in the air", Mr Gibson said.
"There's one plate which is the customers, one's the shareholders, and the other one's employees. And so, it's about how to keep the three plates spinning and working out what they think is the best balance between them," he said.
"Clearly, a lot of businesses at the moment are prioritising shareholders above customers and above employees in many cases — so the balance is a bit out of whack."
While it's been noted that some costs have fallen back to "relatively normal levels" — including on products like fruit and vegetables — other pantry items, such as tinned tuna, meat and dairy, continue to rise.
Mr Gibson said that as a result of those price hikes, Coles should have expected backlash.
"Some prices are just preposterous," he said. People need to be very careful about what they do buy from the supermarkets, if they shop the specials, they'll do okay.
"If they just randomly put things in their trolley, it's going to really hurt. But yeah, I think it's fair, some of the blowback is certainly fair.
"Coles has to expect that sort of thing. It just announced profits that were up about five per cent on last year, so their margin is protected, while other people are being asked to pay 10 per cent more for their groceries."
Greens slam nation's major supermarkets
In the wake of ongoing criticism against our biggest retailers, Greens Leader Adam Bandt has ripped into Coles and Woolies, who he says "make bank off people's pain".
"People are struggling to put food on the table and pay the rent. But that isn’t stopping Coles & Woolies from ripping them off anyway. All while they’re making bumper profits," Bandt said online on Wednesday.
"Coles: $1.1 billion profits, Woolworths: $1.62 billion profits. Big corporations are making banks off people’s pain. We’ve got to reign them in and make them pay their fair share."
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