Expert's price warning for shoppers despite fiery Senate inquiry

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A day after Australia’s major supermarket bosses were questioned about price-gouging allegations, their conduct towards suppliers and, in one case, threatened with jail time, shoppers have been warned to not expect price drops anytime soon.

Woolworths chief executive Brad Banducci had the threat of being found in contempt during his fiery Senate hearing yesterday morning, before Coles counterpart Leah Weckert’s far milder appearance before the same committee in the afternoon.

While both CEOs discussed the importance of providing competitive prices, Swinburne University corporate governance expert Helen Bird said the hearings are unlikely to lead to any drop in prices in store – even if the explanations by the supermarkets about their pricing practices are welcome.

“Sunlight is always the best disinfectant,” Bird said

“But memories are short and in due course we’ll go back to the behaviours that they’ve happily engaged in for many years.

“It’s not going to change things, they’re just going to feel uncomfortable for a while.

“There’s nothing here at this point that’s going to make prices drop.”

Both Banducci and Weckert were grilled on pricing practices yesterday, with the Coles boss admitting her supermarket could improve.

“We have, in good faith, worked with suppliers to make sure they are getting paid fairly and in a large number of cases that has flowed on to higher prices for customers,” Weckert said.

“If you think across our 850 stores, every store has 20,000 products in it with a ticket on it, and have we necessarily kept up with every ticket change that has resulted from those cost price increases? Probably not.

“There are plenty of examples on social media where people have called that out.

“There is no bad intent there, but we definitely could execute against it better, and we are working towards holding ourselves to a higher level of account on that.”

She also said Coles would discuss ways to tell customers when shrinkflation – smaller product sizes sold at the original or higher price – was occurring.

“It would be a reasonable thing to do, wouldn’t it, if you valued your customers, to let them know when the size of an item has decreased, when shrinkflation is happening,” Greens senator Nick McKim said.

“Why wouldn’t you do that?”

“I think it’s a very valid perspective,” Weckert replied.

“I’m happy that we take it away and have a discussion internally about how we might be able to communicate it to customers.”

Banducci, for his part, denied allegations of price-gouging, saying Woolworths tries to help its customers.

“We don’t agree with the assertions that we are price gouging,” he said.

“We are working very hard on an everyday basis to provide value for consumers… and our goal is to help them.”

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He also said Woolworths would support the voluntary supermarket code of conduct being made mandatory – as long as it’s expanded beyond major grocery providers to include other major retail chains.

“I am a grocer, not a lawyer, so I’ll give you my grocer answer… we are very supportive of it being mandatory,” he said.

“We do think it is a grocery code and that therefore it should apply to all people who sell meaningful amounts of groceries in the country.

“That includes all of the other parties we talked about earlier, whether it’s Bunnings in household care or pet care, whether it’s Amazon… because it is in personal care as well as household care, or whether it’s Chemist Warehouse in personal care.

“In saying that, it’s not us deflecting, because it would therefore include (Woolworths Group-owned) Big W and force our Big W team to also lift to the same standard.”

The Senate inquiry is due to deliver its final report by May 7.