Grocery prices ease ahead of Christmas

Australia's annual inflation rate cooled to 4.1 per cent in the December quarter in welcome news for borrowers hoping for interest rate relief.

Australia's annual inflation rate cooled to 4.1 per cent in the December quarter in welcome news for borrowers hoping for interest rate relief. Photo: AAP

The cost of living hit many Aussie families hard this year, but those dreading next month’s holiday food bill might find some relief.

Prices for vegetables, fruit and red meat are dropping, Woolworths stated in an email sent to Everyday Rewards members over the weekend, while Coles told The New Daily that better prices are on offer.

The overall grocery price inflation experienced by customers at Woolworths’ checkouts bottomed out at 3.4 per cent last week.

This is a significant drop – Woolies internal data shows grocery inflation peaked at 10.5 per cent in November 2022, and remained “stubbornly high” until March this year.

Woolworths said it had dropped the prices for 80 “key” red meat products over the past two months, most recently taking an additional 20 per cent off all standard cuts of lamb.

“Our customers have definitely noticed, with lamb sales growing strongly,” Woolworths said.

In October, Coles reported the price of fresh produce – including meat, vegetables, fruit, deli items and bakery products – dropped 2.3 per cent over the first quarter of the 2024 financial year.

Coles said it was “pleased” inflation was easing, and listed where shoppers could capitalise.

“Customers will be able to find great value prices on cucumbers, capsicums, berries and grapes, among other lines at the moment,” Coles stated.

“Red meat is also in deflation and customers can find excellent value across our lamb range. Grocery, dairy, non-food and bakery continued to be in inflation, as reported in our recent Q1 results.”

Inflation decreases

Woolworths’ internal inflation data generally reflected overall inflation rates for grocery products.

The Australian Bureau of Statistics found annual food inflation eased to 4.8 per cent in the September quarter, down from the peak of 9.2 per cent in December 2022.

Fruit and vegetable prices have dropped the most, falling 6.4 per cent in September from the year before.

Aldi research found more than 75 per cent of Australians expected the  cost of their grocery shop will increase by up to 75 per cent before Christmas, so the easing of prices could help lift the burden from shopping for a big Christmas lunch or dinner.

But some shoppers are planning to boycott Woolworths and Coles on December 23 and 24 in protest over high shelf prices remaining, despite both retailers seeing higher profit margins over the past financial year.

Each earned more than $1 billion in profit, while many Australians simultaneously had to cut back their weekly grocery spend due to cost of living pressures.

Many social media commenters said they already shopped at smaller, lower-priced supermarkets, such as Aldi.

While Aldi did not release internal inflation data to TND, Aldi managing director Jordan Lack said the company has seen an increase in shoppers for three consecutive quarters.

“Our latest research confirms that more and more Australian shoppers are looking for ways to be savvy with their spending as we head into one of the most expensive times of the year,” Lack said.

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