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Coles has hit out at “politicised” attacks on the company amid rising grocery prices, and defended itself amid allegations of illusory was/is discount prices.
The supermarket’s chair, James Graham, used his address at the company’s annual general meeting on Tuesday to argue it was wrong to blame supermarkets for rising prices because inflation is a complex, global issue.
“In this context, it has been disappointing to see how cost-of-living issues have been politicised and targeted at supermarket operations,” Graham said in Melbourne.
“This is in sharp contrast to the level of engagement and support of supermarkets by governments and regulators during the Covid lockdown years.”
Representatives of Coles and rival Woolworths have appeared at several parliamentary inquiries, and the major chains are the focus of a government-ordered examination of their pricing and business practices, conducted by the competition regulator.
Graham said there had been a “wider ambition of some behind those inquiries” to provide answers to global inflation issues.
Australia’s major supermarkets have seen their reputations severely damaged amid rising anger over their ability to generate elevated profits at a time of intensifying living costs, marked by high-cost groceries.
Coles recorded a surge in revenue from its groceries business last financial year, which underpinned a robust rise in net profit to $1.1bn. Its larger rival, Woolworths, recorded a $1.7bn net profit result, slightly down on the prior year’s strong result.
Coles fell 221 places from Australia’s fourth most trusted brand to one of the country’s most distrusted brands in just a few months, according to results released by researcher Roy Morgan in May.
This contrasts with the affinity afforded to the major chains during lockdowns, when they were seen as a lifeline for households.
The major chains have faced intense scrutiny over their pricing practices as well as price gouging claims, and have drawn criticism from all political parties before an election expected to be fought on cost-of-living pressures.
Guardian Australia analysis has consistently found that profit margins at the major supermarkets are now significantly higher than pre-pandemic levels, and have jumped ahead of most of their international peers.
Coles uses an alternative, rarely used metric to argue its profits have “remained essentially constant” over the past five years.
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Graham used his address on Tuesday to defend the company against accusations by the Australian Competition and Consumer Commission that Coles and rival Woolworths misled shoppers by offering “illusory” discounts on hundreds of common supermarket products.
The regulator has argued that the supermarkets briefly increased prices on hundreds of products before placing them in discount promotions.
The promotional prices were misleading, according to the regulator, because they were higher than or the same as the product’s regular long-term price before the temporary price spike.
But Graham said that suppliers had requested price increases amid an outbreak of inflation, and then the supermarket had run promotions on those prices.
“The subsequent discounts offered to customers on these items were the result of promotional investment by the supplier and Coles, which delivered a reduction in the shelf price at a time when households were under significant cost-of-living pressure,” Graham said.
“We are very conscious of the significance of these allegations. They go to the heart of customer trust.”
He said Coles was defending the allegations and “will continue to keep shareholders informed”.