FOOD PRICES STILL RISING AT CHECKOUT
FOOD prices at supermarket chains Coles and Woolworths jumped by 9.2 per cent in the December quarter as inflationary pressures from food suppliers to the supermarket aisle races ahead.
That is up from 8.2 per cent in the previous three months to September.
A fresh report from investment bank UBS that surveyed more than
60,000 weekly prices across the heavyweight supermarkets found that inflation in fresh food and groceries was particularly rampant in the second quarter, with prices rising 9.6 per cent. Dried or packaged grocery inflation was slightly lower, although still strong, up 9 per cent.
The stubbornly high inflation rate in the food sector, and in the rest of the economy, could place further pressure on food and grocery manufacturers to lift their prices again, which could trigger a fresh outbreak of price rises at the checkout.
The Australian Bureau of Statistics will report the December quarter inflation figures on Wednesday. Westpac's economists expect the data to show a 1.5 per cent quarter-onquarter rise, taking the annual inflation figure to 7.4 per cent.
UBS analyst Shaun Cousins found that food inflation at Coles was 9.1 per cent in the December quarter (up from 8.1 per cent) and 9.3 per cent at Woolworths (up from 8.4 per cent).
“Food inflation is expected to continue,” Mr Cousins said in his latest Australian supermarkets report.
“Trade feedback indicates cost pressures remain, for example supply chain, specific product inputs and are arguably still rising for dry grocery suppliers.”