Supermarkets Continue To Make More Money. No Wonder People Shoplift.

Through lockdowns, floods and the cost-of-living crisis, the two players in Australia’s supermarket duopoly have both increased their profits and their margins.

Coles and Woolworths not only sold more – they sold it for more. 

No wonder one in five people shoplifts. And gleans immense pleasure from it.  

Woolworths’ total profits for the first half of the 2022-23 financial year, were $907 million, up 14 per cent the year before. Coles’ half-yearly report revealed they made a $616 million profit.

Financial reports from the supermarket giants’ food divisions, which dominate more than 60 per cent of the market share, showed that after growth slowed in 2019, margins have since steadily swelled. 

Coles’ gross margin rose from 24.7 per cent pre-pandemic to 26.5 per cent today, while Woolworths’ food sales margins increased from 29.1 per cent to 30.7 per cent, according to Guardian Australia’s analysis. 

This means whatever unexpected, additional costs that hit over the past few years – petrol price hikes due to the war in Ukraine, floods wiping out lettuce crops – have been more than covered. How did they make it happen? Those expenses trickled down to us so those big business bottom lines weren’t disturbed. 

Coles disputed this at a cost-of-living Senate inquiry earlier this year and told the committee in January it had been absorbing increased costs from suppliers rather than passing them on to customers.

And both chains have defended the gross margin gains and chalked them up to cost-cutting in other areas and “smarter buying” from suppliers.

“There are many factors that influence our gross margin which are not related to the prices customers pay, including product and business mix of sales and changes in stock loss,” a Woolworths spokesperson told VICE.

“One example is that low-margin cigarette sales continue to decline resulting in average margins increasing.”

A Coles spokesperson also attributed the gross margin expansion to strategic sourcing initiatives and reduced COVID-related costs.

“We know many of our customers rely on us to help them make ends meet and we are working harder than ever to deliver on value,” a Coles spokesperson told VICE.

Meanwhile, however, a report analysing the costs of 60,000 supermarket items published by investment bank UBS on Tuesday noted supermarket products became 9.6 per cent more expensive from April 2022 to April 2023. 

Obviously, nothing here is illegal. Businesses make profit, investors go boom, rich are rich, poor are poor. That’s our world. 

Coles and Woolworths are just two more notches on the bedpost while we get fucked by high inflation. 

Australia’s big four banks also all reported record profits this year off the back of rising interest rates, oil and gas companies worldwide have yielded more billions than ever before, while companies like Qantas, which both laid off staff and took government Jobkeeper payments during the pandemic to stave off windfalls when borders were shut, returned with record revenue. 

All this excess conjures questions, like how are their profits unaffected by the high cost of living when the rest of us can barely afford to keep the cold wind off our backs? 

In truth, they are linked. 

While business leaders love to argue that raising the minimum wage would be bad for the economy by causing inflation to spike, in fact, rising corporate profits have accounted for more than two-thirds of Australia’s high inflation, according to research from the Australia Institute published in February. 

And the cost of food is also an inflation driver within the economy. Because it’s everyone’s second highest expense after housing, according to the Australian Bureau of Statistics, when prices go up, the Consumer Price Index as a whole is affected pretty quickly.

This latest win for supermarkets has sparked calls from politicians for better transparency around price-setting as well as concerns over profiteering.

“We’d like to see the ACCC be given divestment powers whereby they can make an application to a court for companies to be broken up when monopolistic behaviour is restricting competition and gouging customers,” Greens senator Nick McKim said this week.

“It’s no surprise to have it revealed that the supermarkets have increased their profits in recent times and like so many other corporations, there is definitely profiteering going on.”

For now, all one can do is steal meat.

Aleksandra Bliszczyk is a Senior Reporter for VICE Australia. Follow her on Instagram, or on Twitter.