<
https://www.theguardian.com/australia-news/2023/jul/27/australian-supermarket-profits-rise-woolworths-coles>
"Australia’s big supermarkets are far more profitable than their British peers
Tesco and Sainsbury’s, and the gulf has widened during the pandemic, leaving
shoppers with fast-escalating food bills in a cost-of-living crisis.
Exclusive
Guardian Australia analysis of financial accounts shows Coles and
Woolworths have consistently expanded profit margins for their food businesses
at the same time as counterparts in Europe report falling or mixed
profitability.
The difference is tied to Australia’s tightly held supermarket sector dominated
by just two chains, sparking calls for reforms and exasperating those who have
watched the dominant duopoly seize control.
“In Europe they have competition; Australia has very little,” said Vas
Kolesnikoff, a former investment banker turned governance expert.
“It’s a huge concern. Coles and Woolworths are very strong and their margins
are holding up.”
Australia’s two big chains have boosted profit margins throughout the pandemic
and inflationary period. Their preferred gauge of profitability, known as Ebit
margins or operating margins, has spiked to 5.3% at Coles and 5.9% at
Woolworths, according to financial disclosures.
The equivalent profit margins at the grocery divisions of the major UK chains
Tesco and Sainsbury’s are 3.8% and 3% respectively, after reporting up and down
results over the pandemic.
A
Guardian Essential poll found that almost all Australians surveyed had
noticed increased prices in their weekly grocery shop, prompting many to go
without some items.
According to the poll of 2,087 respondents, 72% are buying less in response to
the higher costs, while 76% are opting for different products or brands. Just
over half are now shopping at a different grocery store.
Evidence of falling demand for grocery items is a notable data point for
economists because it shows supermarkets are increasing profit margins at the
same time as demand is waning, which wouldn’t occur in a properly functioning
market."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
