SYDNEY (Reuters) – Australia’s largest grocer said on Tuesday that while food inflation was starting to fall, prices were taking longer than expected to fall from pandemic highs.
Woolworths Group Ltd chief executive Brad Banducci said while price increases were slowing for some products and vegetables were now “deflationary”, elsewhere prices were falling more slowly or not at all .
“We’ve seen food prices go down overall, but much slower than anyone expected,” Banducci told the Australian Financial Review’s Business Summit in Sydney on Tuesday. “Highest reading since 2006. Vegetable prices rose 5.7% over the same period, down from 17.2% in the September quarter.
Stubborn inflation poses a challenge for the Reserve Bank of Australia, which on Tuesday raised its cash rate to its highest level in more than a decade. However, as consumer spending picks up
Lower freight rates will help lower prices, Banducci said, adding that Woolworths had just negotiated a new freight agreement.