Aussie supermarkets set to capitalise on high inflation, but softer demand ahead
Australian supermarkets will reap bigger profits in fiscal 2023 half-year due to decades-high inflation and increased savings, but analysts warned of a rough second-half as households reel from mounting expenses due to higher cost of living.
Top supermarket chains Woolworths Group (WOW.AX) and Coles Group (COL.AX) will likely see growth in their half-year profit, according to analyst estimates, helped by higher shelf prices and lower COVID-19 related costs.
Australian households face higher grocery and energy bills due to global inflationary pressures, while budgets are further squeezed by higher mortgage payments because of the central bank’s rate hikes aiming to quell inflation.
The hikes have added A$900 a month in repayments to the average A$500,000 mortgage, according to an estimate.
“There’s a bit of a disconnect between confidence and reality at the moment – the confidence levels are low, but people are still spending. So I think outlook statements will be cautious” said Matthew Haupt, a lead portfolio manager whose WAM Leaders fund has holdings in Woolworths and Coles.
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