Coles posts $1.1 billion profit as meat and veggie prices drop

Coles says the price of groceries is continuing to moderate and some fresh produce prices are falling as families are demanding better value offers from the big supermarkets.

The grocery giant revealed on Tuesday that its profits had increased by 4.8 per cent to $1.09 billion in the 12 moths to June 25, with sales inching up by 5.9 per cent to $40.5 billion. The result was just shy of market expectations, with analysts predicting a $1.1 billion profit.

Price inflation across the group’s supermarkets came in at 6.7 per cent for the year, but the company said inflation was slowing, with prices increasing by 5.8 per cent in the June quarter.

Cucumbers, broccoli and capsicum are among the key fresh products that are decreasing in price, while the affordability of red meat is also improving, the company said.

The most recent quarterly data from the Australian Bureau of Statistics put food and non-alcoholic beverage inflation at 7.5 per cent for the June quarter, compared with the same period in 2022.

In her first full-year results as Coles’ chief executive, Leah Weckert said consumers were demanding more from supermarkets as their budgets become more stretched.

“They are looking to the supermarket to help them do more for their budget,” she said. “Across the board, customers are economising in lots of different ways.”

She said young families and those under the age of 34 were among those working hardest to reduce their spending. The company is now seeing signs that consumers are shifting from eating out to making meals at home.