Australian shoppers could soon feel the next wave of cost-of-living pressure, with supermarket prices tipped to rise within weeks.
Coles and Woolworths have confirmed some suppliers are already pushing for price increases, but a lag in the system means shoppers have yet to see the impact.
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Under the grocery code of conduct, supermarkets are given 30 days to negotiate any price changes, creating a delay between rising supplier costs and what consumers ultimately pay at the checkout.
That buffer is about to run out.
Fred Harrison, CEO of Ritchies IGA, told Sunrise on Friday while prices have remained relatively steady in recent weeks, pressure is building, and price reviews are looming.
“There is a formula … the grocery code of conduct. Fuel levies come into play. Often, a supplier may ask us to apply a fuel levy to their product,” Harrison said.
“We are seeing some suppliers, as Coles and Woolies have indicated as well, saying that they are perhaps building towards looking for a price review down the track.”
Harrison warned any increases may not be immediate, but they are likely approaching.
He said potential price rises could land anywhere between four and 13 weeks, depending on how long fuel prices remain elevated, with fresh food the first to be hit.
“Fruit and veg is probably the product that reflects what’s happening in the market at any one point in time. So there is certainly fuel levies coming in across the produce game,” Harrison said.
Fred Harrison, CEO of Ritchies IGA, has told Sunrise supermarket prices will likely rise within weeks. Credit: Sunrise While increases are expected, Harrison stressed they are unlikely to be dramatic, with fuel levies sitting in the single-digit percentage range.
Even so, the shift could be enough to squeeze household budgets already under pressure.
Retailers, he said, are trying to hold the line where possible.
“We’ve never been more price competitive as we are today. But we understand that, particularly in fresh food, there has to be some adjustment with things like fuel levies being applied to produce,” he said.
Unlike the COVID-19 pandemic, where shortages drove disruption, supply chains remain stable, with stock continuing to flow.