CPI fell to 3.5% in July, slightly above expectations
Inflation has fallen slightly but not nearly enough for the Reserve Bank to cut interest rates any time soon. The treasurer concedes inflation remains sticky but says energy bill relief has helped the households doing it tough. The latest data comes as Australia’s supermarket giants come under scrutiny accused of profiting during a cost-of living crisis.
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TVTranscript
00:00Inflation might be coming down but the heat on our supermarkets is only rising.
00:07I think the supermarket makes so much profit it doesn't look after all the people.
00:14It is definitely too expensive these days.
00:16New inflation data shows the rise in prices is slowing.
00:20It's at 3.5% for the year to July, down from 3.8% in June.
00:26As lower fuel prices and energy rebates ease the pressure.
00:30Inflation is still sticky and stubborn in our economy but it's coming down.
00:35But at the checkout, accusations our big grocers are earning too much.
00:41When farmers put up their prices for meat they pass those on straight to the customer
00:45but when they start dropping those prices it just falls like feathers.
00:49And to us that's price gouging.
00:51With the supermarkets, yes we will also push to make price gouging illegal.
00:55The reason? Their take is increasing.
00:58Excluding their liquor stores, earnings from their Australian supermarkets are very healthy
01:04before costs like tax and interest are taken out.
01:07Woolworths wrote off a huge amount of the value of its New Zealand business.
01:11Excluding that, the overall results show strong profits for both.
01:16The concept of price gouging really depends on what's fair for a business to earn.
01:21The margin of profit our supermarkets make is higher than world averages
01:25but lower than historical standards.
01:28Stopping thieves and controlling costs are boosting profits
01:32while outside competitors are trying their hand too.
01:35It's companies like Bunnings or Chemist Warehouse that are stocking more grocery like items
01:40and winning some market share from the supermarket.
01:43The outgoing boss of Woolworths points to a bigger problem.
01:46Our customers are under enormous pressure.
01:48It is not pressure driven by supermarkets
01:51but the pressure that the household faces on the rest of their budget.
01:55In particular housing.
01:57While inflation is easing, massive mortgages and rocketing rents are taking a bigger slice of household budgets.
02:03Until interest rates come down, millions of Australians will be feeling that pain in their hip pocket.