The true extent of the labor shortage in supermarkets has been exposed as a boss says he is struggling to find workers because of a well-paying job.
Cost of living pressures are mounting for many Australians and supermarkets have warned there is more pain ahead for your weekly grocery bill.
Labor shortages, the cost of raw materials, and the rising cost of fuel and utilities are some of the factors that affect the price of groceries.
Speaking at Australia’s Global Food Forum this week, Coles chief executive Steven Cain said Australia was experiencing a labor crisis across many sectors.
“It’s been compounded by what’s happening with Covid and the flu, our absenteeism today is twice normal with Covid and the flu, and churn in most industries is increasing,” he said .
“I was talking to one of our store managers last week and asked him what the biggest challenge was.
“He said he was definitely trying to find the right people with the right skills, but he lost one in the shop that’s going to be an $80,000-a-year dishwasher.”
Mr Cain said grocery suppliers were also calling for further price hikes.
“We received five times more requests for price increases than last year. Five times,” he said.
A Coles spokesperson told NCA NewsWire on Thursday that the supermarket’s goal was to reduce costs for families.
“We are aware that there are a number of factors driving inflation for all retailers, including rising raw material costs, rising energy prices and transportation costs, but there are many ways to deliver value to customers,” they said. .
It includes weekly promotions and other offers such as Flybuys points.
“Since the beginning of the financial year, we have reduced prices on more than 2,000 items in our range of more than 20,000 products,” the spokesperson said.
“Customers who purchase their My Weekly Specials items can save an average of $65 off their cart each week.”
Woolworths fruit and vegetable general manager Paul Turner said heavy rain and poor sunshine in Queensland had led to reduced supply and quality of courgettes, beans and broccolini.
The same was true for vine, gourmet, cherry and solanato tomatoes, he added.
“We are still experiencing lettuce and berry supply issues, as new crops have been planted it will take a few weeks for stocks to return to more stable levels,” he said.
“Right now, apples and citrus are at their peak, and pears and limewashed potatoes are in great abundance and of great value to our customers.
Mr Turner said the Hass avocado season was now underway and Woolworths had lowered prices on more than 300 winter essentials.
Woolworths has around 5,000 different products on sale each week.
In May, Woolworths slashed the price of more than 300 winter goods through August, including roast pork, soups and cold and flu medicines.
Woolworths has also recently introduced more than 650 own brand products to its low cost programme, including flour, sugar and snacks.
Third-quarter results in May showed Woolworths vegetable prices were in inflation, while fruit remained in slight deflation for the first three months of the year, driven by apple and avocado prices.
Woolworths reported overall average price inflation of 2.7%.
For the same period, Coles reported inflation of 3.3%.
In ALDI Australia’s 2022 price report, released last month, the company said a basket at ALDI was at least 15.6% cheaper than other supermarkets, meaning an average family could save $1555 per year.
“Our research shows that the majority (88%) of Australian shoppers are planning to change their spending over the next year, and that starts with finding the best deals,” said ALDI Australia Managing Director Oliver Bongardt, in the report.
According to the report, an average family of two adults and two children spends $192.19 per week or $9,994.05 per year on groceries.
But with no end in sight to Australia’s economic woes, it looks like prices are set to continue rising for some time.
Australian Food and Grocery Council chief executive Tanya Barden told NCA NewsWire that Australian food and grocery makers have faced costs that affect the entire supply chain.
“There have been significant increases in their costs due to a combination of factors: the pandemic, which has affected labor and the availability of key inputs; flooding and severe weather that impacted supply chains and shipping costs; and geopolitical factors, including the war in Ukraine, which have impacted global commodity prices,” she said.
“Ingredient, packaging and shipping costs have all been affected. The global rise in the price of oil is affecting the cost of transportation, packaging materials and fertilizers.
“For businesses, this drives up packaging costs by 10-20% and fuel costs by 10-15%.”
Ms Barden said this followed a decade of local food makers and grocery stores absorbing cost increases.
“A lot of these companies have reached a tipping point where they have to pass on costs to stay viable,” she said.
“The harsh reality is that this is a global trend and unfortunately the costs are expected to continue to rise.
“Cost pressures are felt across the entire supply chain – from farmers to retailers – and it will get worse before it gets better.”
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