Australian Supermarkets Face Backlash Over Soaring Profits Despite Cost of Living Crisis

The latest financial reports from Australia’s supermarket giants paint a disturbing picture of corporate profiteering during a time when ordinary Australians are struggling with relentless cost of living pressures.

According to the Australian Competition and Consumer Commission (ACCC), gross profit margins at major supermarkets have jumped significantly between 2020-2023. Woolworths saw its food retail gross profit margins climb from 29.1% to 31.6%, while Coles increased from 24.9% to 26.2%. Perhaps most concerning is that these profit margins continued to expand even as inflation reached multi-decade highs and Australian households faced unprecedented budget constraints.

The data shows a troubling trend: when input costs rise, supermarkets not only pass these increases onto consumers but often add additional margin expansion. This pattern raises serious questions about the competitive health of Australia’s grocery sector, which is dominated by just a few major players.

What makes this particularly galling is the timing. While millions of Australians have been forced to make difficult choices about basic necessities, these essential retailers have managed to extract even higher profits from their captive customer base. The ACCC report confirms what many shoppers have long suspected – that price increases at the checkout have outpaced the genuine cost pressures faced by retailers.

The findings contradict supermarket claims that they’re simply passing on supplier increases. Instead, the evidence suggests a market structure that allows major chains to prioritize shareholder returns over fair pricing for consumers during an economic crisis.

For a country already grappling with housing affordability problems and rising utility costs, the supermarket sector’s apparent profiteering adds yet another burden to household budgets. Regulatory scrutiny and potential reform of this essential market seems long overdue.

As Australians continue to feel the squeeze, the question remains: when will our supermarkets be held accountable for their role in the cost of living crisis?