A key driver of supermarket price increases has been down to requests for hikes by suppliers and farmers, Coles has told a parliamentary inquiry.
In a submission to a committee on supermarket prices, Coles said it has received on average more than 70 requests a week from suppliers and farmers, which was almost double the level a few years ago.
The supermarket giant also said it has been affected by increased energy, labour, logistics and packaging costs.
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Coles has told the committee, led by Greens senator Nick McKim, that for every $100 of operating revenue earned, $73.09 was spent on buying and getting products to stores, with the vast majority going to suppliers.
Wages and benefits were the next highest expenditures and would account for $11.87 out of every $100.
“We highly value these long-term partnerships and it is our ambition to continue to build on these successes and contribute to the long-term sustainability of our valued suppliers,” Coles said in its submission.
The supermarket chain said its suppliers are subject to the same cost pressures that households are grappling with.
“We work constructively with our suppliers on promotional campaigns to offer great value to customers and to limit or defer the impact of supplier cost price increases to keep costs low for customers,” the submission said.
Leading economist and former Australian Competition and Consumer Commission (ACCC) chair Allan Fels, said supermarkets were among the businesses that overcharge consumers by leveraging a lack of competition in the market.
In an address to the National Press Club on Wednesday, he said when costs rose business prices skyrocketed, but when they fell, prices were very slow to come back down.