Is Coles raking in profits? The market says no

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It is a tough gig for Coles boss Leah Weckert. Some criticise the company for making too much money while shareholders complain it isn’t making enough.

The lure of being caught up in the wave of detractors who blame the cost of living woes on corporate greed and price gouging is stronger than it’s ever been. Coles’ latest billion-dollar profit will only embolden that chorus.

When it comes to answering their critics, Weckert and Commonwealth Bank boss Matt Comyn are singing from the same hymn sheet. Their companies need to be solidly profitable to provide services – be they loans or groceries – and employ hundreds of thousands of workers.Attempting to explain why any company isn’t earning too much money requires chief executives contorting their sales pitch.

It did produce sales that were around 6 per cent ahead of last year, but that reflects food inflation – which is real. Some categories like vegetables are already experiencing deflation, as is meat. But dairy and bakery items remain sticky and there are no signs of improvement.There is clearly a movement in other countries like the UK to put some controls around food pricing, but the push in Australia for price caps on essential foods has been fairly muted.

 

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