Wholesaler predicts more checkout pain

THE food and grocery wholesaler stocking thousands of stores across Australia, including IGA supermarkets, says about 60 per cent of its suppliers have sought price hikes amid rising inflation.

Metcash unveiled its financial results for the year ended April 30 on Monday and highlighted the elevated inflation.

The company said wholesale price inflation had accelerated in the second half of its financial year, with price hikes received from about 60 per cent of suppliers.

Across the year, wholesale price inflation reached 0.5 per cent, the company reported.

New group chief executive Doug Jones said the company was looking at different options to curb the impact of the price increases.

“We are continuing to work closely with our suppliers and retailers to help shoppers manage the impact of inflation by providing better value options through offering a wider range of products at competitive prices,” Mr Jones said.

He said there was “uncertainty over the level of inflation going forward” as well as how the impact of inflation and other cost-of-living increases could affect customer behaviour in Metcash’s retail networks.

Headline inflation in the year to March soared to 5.1 per cent – the highest since 2001.

The cost of food and nonalcoholic beverages jumped by 4.3 per cent alone between the 2021 and 2022 March quarters, according to the Consumer Price Index.

In terms of groceries, the cost of fruit and vegetables grew by 6.7 per cent in the last year, while meat and seafoods increased by 6.2 per cent. Bread and cereal products also increased by 3 per cent, dairy and dairy-related products by 4.1 per cent and other food products by 4.2 per cent.

Reserve Bank governor Philip Lowe last week predicted inflation would reach a 32year high of 7 per cent before the year’s end.

Jim Chalmers has also warned that inflation would be “significantly higher” than expected.

The Treasurer said he would provide an update on inflation to the parliament when it resumed next month.

In a speech to the American Chamber of Commerce in Australia last week, Dr Lowe said Australia was no exception to the general inflation trend, although it was below that of most other advanced economies.

He said global factors, such as the interruption of supply chains during the pandemic and Russia’s invasion of Ukraine all contributed.

But domestic factors were also increasingly at play, including Australia’s strong recovery from the pandemic and growth in domestic spending.