Woolworths Group CEO Brad Banducci has assured customers price hikes have almost peaked and Christmas this year should be affordable.
Woolworths on Thursday reported an annual profit of $1.5 billion, with sales jumping 9.2 per cent to $60.85 billion in the year ending June 30.
Mr Banducci said the supermarket’s primary focus is to give “value for money” while justifying its annual profit amid rising grocery prices.
Woolworths' response to inflationary pressure has already seen the supermarket increase its food prices by 2.7 per cent in the last quarter, with prices expected to keep rising.
When asked whether he could justify the price hikes after reporting a profit, Mr Banducci responded to reporters saying the supermarket was always "trying to balance doing the right things for their customers, teams, suppliers and shareholders”.
"What the story doesn't tell is the level of investment which we've made in the last year, particularly to supply change resilience, upgrading DCs (distribution centres) given the extreme weather events we've had, aid local communities and supporting them where we can," he said.
Woolworths boss predicts inflation peak before Christmas
While Mr Banducci could not confirm exactly when inflation would peak, but he expects it will be in the next couple of months and well before Christmas.
"Our view right now is we will see the peak come before Christmas," he said.
"And we really want to give our customers a great inspirational, affordable Christmas so we think it comes probably in the next couple of months and then hopefully starts going down."
The federal government and Reserve Bank previously forecast inflation will peak at 7.75 per cent in the December quarter of 2022, before falling from 2023 through to 2024.
Vegetable prices predicted to fall
The Woolies boss also shared his thoughts on recent vegetable prices, claiming it's the first time in his memory fresh vegetable prices have been at such "elevated levels".
"Now, the good thing is they're about to come down but they're been elevated," he said.
He revealed that while it's normal to see price fluctuation in fruit due to seasonality, vegetables are normally more stable.
However, the catastrophic floods in Queensland and northern NSW and ongoing wet wetaher, saw the price of vegetables, like lettuce, skyrocket. Iceberg lettuce reached prices of over $10 each but can now be bought for closer to $2.
Mr Banducci said inflation has touched "every part of our economy" for "good or bad", whether it's transportation costs, warehouse costs or even packaging costs.
Budgeting advice for shoppers
Mr Banducci shared some advice for struggling shoppers, suggesting they make trade-offs to stick to their weekly budget.
"It may mean in some cases making trade-offs in terms of choosing a different form of protein, a more affordable form of protein," he said.
"So you might go from beef to chicken mince or pork mince, or you might have a scenario where someone goes from a fresh vegetable to a frozen solution."
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