Woolworths accused of raising prices to plug earnings hole

 In Australia, NewZealand, Woolworths
Supermarket giant Woolworths has been lifting grocery prices in a move aimed at plugging a hole in earnings from its loss-making hardware business and building a war chest to tackle fast-growing discounter Aldi.
The price rises contributed to an acceleration in food inflation, which has returned to positive territory after two years of deflation.
According to a report by Citigroup, Woolworths has raised prices on a wide range of lower-profile products – such as baked beans, yoghurt, pasta and cream – by between 1.3 per cent and 8.7 per cent over the last two months.
Citigroup analyst Craig Woolford said the price increases started in May and had become more widespread. In most cases they were not triggered by suppliers.
“This is known as ‘price creep’ and may reflect food and liquor needing to plug a hole in earnings left by Big W and Masters’ weakness,” said Mr Woolford.
“Based on our feedback, the price rises have been made to boost gross margins,” he said.  Sydney Morning Herald – Read more…

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