Coles expects inflation to rise

Coles Group says that Australia’s lack of migration and the potential invasion of Ukraine could keep inflation up.
Global events such as the rise in oil prices and the Ukraine tensions are expected to push up wages in Australia.
As a result, Australia’s wage inflation could increase due to the country’s lack of skilled workers. The Russian invasion could affect tourism and hospitality sectors.
Consumers might start looking for cheaper products due to the increasing prices of various goods and services. Home prices are expected to increase in the near future as consumers look for value.
Despite the current economic conditions, there’s still plenty of money in the bank accounts of consumers around the world.
In order to boost its home brand sales, Coles is planning to increase its share of the total sales by 40 per cent.
During the first half of the year, the company experienced a deflationary market. However, during the second half, it saw a rise in prices.
Although it’s not yet clear if the company will see significant price hikes this year, input costs and other supply chain costs are expected to increase.
Coles’ sales increased in January due to the outbreak of the flu in the East Coast. However, they started to moderate after that period.
Due to the recent rail line washout, the supply of packaged food in Western Australia was severely disrupted.
The company’s sales grew by 1 per cent in the first half of 2022, which was mainly due to the impact of the COVID-19 lockdowns.
The company’s profit declined 2 per cent to $549 million for the 27 weeks ended January 2. However, this was still above the $528 million that analysts expected.
The company’s convenience store sales fell 8.1 percent to $578 million. However, earnings dropped 62.5 percent to $12 million due to the weaker tobacco volumes.
Coles’ managing director said that the company’s Smarter Selling program is on track to deliver $1 billion in cost savings by fiscal 2023.
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