have also raised prices in response to rising food and other costs, though some believe it will get harder for the retail giants.Richardson says while newer entrants such as Costco, IGA and ALDI have made the supermarket segment more competitive, it is still dominated by major players Coles and Woolworths, which had the pricing power to take advantage of the recent demand and supply imbalance.
When Coles reported a $1.09 billion in profit for the half, the ACTU accused supermarkets of using the cost-of-living crisis as a “a smokescreen to push up their profit margins”. The market was less than impressed and sent the retail giant’s share price tumbling 7.1 per cent. Shaw and Partners senior investment partner Adam Dawes says: “Domino’s is a classic example because it’s a business with more customers from lower socio-economic backgrounds, who are more sensitive to price movements.”
Sectors such as banking reported broadly robust results amid the inflationary environment, including some record profit results. Shortly after CBA announced its record $10.2 billion profit, the bank was criticised by some for growing its profits at a time when customers were feeling the pressure of higher interest rates and cost-of-living pressures. CBA chief executive Matt Comyn, however,, saying it needed to make a return for its shareholders, so it could support the wider economy amid tougher conditions.
Even so, official data this week showed inflation slowed to just 4.9 per cent in the year to July, and both Liu and Richardson say real price increases would probably ease in the year ahead.