Why Coles and Woolies are charging you more for groceries

Tom Flanagan
News Reporter

Supermarket shoppers across Australia are starting to feel the pinch when it comes to their groceries.

Both Coles and Woolworths announced its store prices rose over the past quarter.

Coles shoppers were worst hit and faced a rise of 1.4 per cent over the September quarter – a hike the supermarket giant put down to the lasting effects of the ongoing drought.

“The long-term effects of the drought is having an impact which has contributed to price inflation for the quarter,” the supermarket said.

Woolworths shoppers faced an increase of 0.3 per cent on average, with meat, deli and baked goods “directly impacted” by the drought.

Woolworths and Coles' prices have risen as a result of the drought. Source: Getty

Retail expert Professor Gary Mortimer at Queensland University of Technology told Yahoo News Australia the hike was inevitable and shoppers were finally realising the implications of the drought has on them.

“Australian consumers living on the eastern sea board don’t realise how drought effects them,” he said.

“We forget all of our grain, bread, meat, beef, fresh produce and even eggs [come from Australian farmers].

“While there’s always products coming through, with an extensive period of drought this is where we’re seeing a decline in crops and fresh produce and in quality.

Therefore we’re now starting to see these price increases seep through the markets.”

Professor Mortimer said while shoppers may be forced to change their approach to the weekly shop, he doesn’t expect there to be a significant price increase across the big two supermarkets.

The price of supermarket meat has forced some shoppers to become vegan. Source: AAP

Vegan trend influenced by price

He noted one growing trend in shoppers was vegetarianism and veganism, but not necessarily as a result of animal rights beliefs.

“You can change the types of products you buy [to tackle inflation]. There’s already an increased proportion people turning to vegetarian and veganism due to economic issues,” Professor Mortimer told Yahoo News Australia.

If shoppers aren’t willing to part with meat, Professor Mortimer said consumers will most likely opt for budget cuts of Australian lamb and beef as opposed to premium meats.

Another example of where customers may save his switching to frozen vegetables instead of buying fresh produce.

“Wear the cost increase or change your behaviour,” he warned customers.

Woolworths and Coles may look to counteract price hike

Not all products are set to face an increase in price.

Woolworths noted that when excluding tobacco and fruit and vegetables from their first quarter, average prices actually decreased by 0.6 per cent.

Professor Mortimer said we won’t see a price hike in dry consumables such as toothpaste and laundry powder, and that the supermarkets may actually try and negotiate with global suppliers to provide an element of respite to shoppers.

“We might see supermarkets negotiating with the likes of Palmolive and Unilever asking ‘can we get some price relief on household basics?’ such as toilet paper to offset the price increase.” he predicted.

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