Supermarket giant Coles has suggested shoppers would pay more for groceries and hinted it would pass on cost increases to customers.
Wesfarmers, the parent company of Australia’s second-largest supermarket chain, is preparing to spin off Coles into a separate listed company.
Rob Scott, the managing director of the Wesfarmers conglomerate, said Coles would rather charge customers more rather than absorb inflationary costs.
Supermarket giant Coles (Perth store pictured) has suggested shoppers would pay more for groceries and hinted it would pass on cost increases to customers
Wesfarmers, the parent company of Australia’s second-largest supermarket chain, is preparing to spin off Coles into a separate listed company
‘When there are legitimate costs pressures we do see that ability to flow prices through,’ he told journalists during a telephone conference call on Thursday.
He also suggested Coles shoppers valued quality more than price, even down the supermarket giant has used English rock band Status Quo’s Down Down hit to promote its lower prices.
‘There continues to be a strong demand from customers for value – price is important but it does also go to quality and the product that we’re selling,’ Mr Scott said.
Grocery prices fell during the March quarter, with food and liquor price deflation of 0.7 per cent.
Rob Scott, the managing director of the Wesfarmers conglomerate, said Coles would rather charge customers more rather than absorb inflationary costs
Coles, which has 807 supermarkets (Sydney outlet pictured across Australia, launched a new marketing slogan, ‘Good things are happening at Coles’ during the March quarter
Coles reported its comparable food and liquor sales had increased by 0.9 per cent during the financial year so far, which began in July.
The company, which has 807 supermarkets across Australia, launched a new marketing slogan, ‘Good things are happening at Coles’ during the March quarter, as it turns the focus away from price reductions.
Coles managing director John Durkan said this would ‘continue to build trust with our customers and position us well for long term growth’.
‘Continued improvement in customer satisfaction levels was a highlight for the quarter, particularly in the areas of customer service, range and availability, which supported continued growth in customer transactions,’ he said.