Next blow for Woolies, Coles: zero food price inflation

 In Australia, Coles, NewZealand, Woolworths
Stalled price growth for goods such as wheat and sugar are likely to cost Australia’s supermarket giants more than the price war they are engaging in, according to Citigroup Research.
Citi, which has a ‘sell’ recommendation for shares in Woolworths and Wesfarmers, owner of Coles, expects price rises to fall away considerably as growth in the cost of food stuffs drops from 2 per cent to "virtually zero" within six months.
Citi senior retail analyst Craig Woolford said price-earnings ratios of the two supermarket giants were also "highly correlated" with food inflation figures for key grocery commodities.  Sydney Morning Herald – Read more…

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