Australian grocery giant Coles has reportedly denied accusations of price gouging amid the political scrutiny over inflation in the sector.
Coles CEO Leah Weckert told reporters the retailer had recorded flat earning margins for several years and needed profit to pay workers, suppliers and shareholders, according to Reuters.
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In the past five years “at least”, Weckert said Coles had made under A$0.03 of profit per dollar spent by consumers.
She said Coles’ profit “has not gone up as we have seen inflation come through”.
Weckert also stressed inflation was “not unique to Australia” and that it was “a global issue”, Reuters and The Wall Street Journal reported.
The media briefing took place following the release of its Coles’ half-year results, in which the group saw underlying profits drop 8.4% compared to the year prior to A$589m ($386m).
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By GlobalDataColes recorded group revenue growth of 3.7% for the period, at A$22.2bn, while total group EBIT was down 5.1% at around $1.01bn.
The retailer’s shares were up 5.48% at A$16.75 at the time of publication.
Weckert’s comments come as Coles, Australia’s second-largest grocer, faces allegations of hiking product prices beyond reasonable levels.
Australia’s parliament first signalled plans to initiate a probe into Coles and its local peer Woolworths last December, over what the national Greens party believed to be price-gouging.
Last month, the Australian Competition & Consumer Commission (ACCC) also announced it would be launching a year-long investigation into Coles and Woolworths, which would include “the pricing practices of the supermarkets and the relationship between wholesale, including farmgate and retail prices”.
In the announcement, the ACCC said it would assess how the supermarkets had changed since the last inquiry in 2008.
Both Coles and Woolworths collectively hold around two-thirds of the Australian grocery market share. German discounter Aldi controls just over 10%.
