Coles, Woolworths, ALDI and IGA set to raise the prices of hundreds of goods within weeks, worsening the cost of living in Australia

Coles and Woolworths set to raise prices AGAIN – days after Daily Mail Australia revealed prices

Coles, Woolworths, ALDIA and IGA to raise prices of hundreds of goods in weeks, deteriorating Australia’s cost of living crisis.

From August 1, higher grocery bills are expected as supermarkets agree to price increase requests from suppliers of processed and packaged goods who face higher costs of their own.

Inflation rose to 5.1 percent in March in the previous 12 months, on the back of higher housing costs and fuel prices.

Coles, Woolworths, ALDI and IGA set to raise the prices of hundreds of goods within weeks, worsening the cost of living in Australia

Supermarkets have agreed to price increase requests from suppliers of processed and packaged goods facing their own increased costs

Supermarkets have agreed to price increase requests from suppliers of processed and packaged goods facing their own increased costs

It is expected to rise again on July 27, following a projected 50-point increase in inflation this week.

Prices of fresh food and meat in supermarkets change weekly in response to supply – including growing conditions – and consumer demand.

But prices for packaged and processed foods are usually negotiated using a code of conduct that allows for 30-day negotiations.

But it could take up to three months for price hikes to hit the shelves – the slowdown in inflation numbers from April to early August.

Coles CEO Steven Cain said: the Australian it had received five times the usual volume of price increase requests from suppliers.

It could take up to three months for price hikes to hit the shelves - the slowdown in inflation numbers from April to early August

It could take up to three months for price hikes to hit the shelves – the slowdown in inflation numbers from April to early August

Supermarket prices have become a hot topic in 2022 as the cost of living crisis escalates in Australia

Supermarket prices have become a hot topic in 2022 as the cost of living crisis escalates in Australia

He also predicted additional price increases due to higher labor costs.

Coles reported 3.3 percent price inflation in the last quarter, while Woolworths reported a 2.7 percent increase.

The new blow to domestic shoppers comes just days after Daily Mail Australia showed just how much cheaper local markets can be than Woolworths.

Daily Mail Australia bought fruit, vegetables and eggs from Woolworths and Paddy’s Market in western China for a week Sydney – use an identical shopping list and buy the same weights – and the supermarket giant was almost twice as expensive.

The same trolley load that cost $109.50 at Woolworths in Leichhardt on Friday, July 1, was just $59.75 at Paddy’s on the same day.

The nagging suspicion Australians have that their local large supermarket is no longer the cheapest option for fresh food products has clearly proved true

The nagging suspicion Australians have that their local large supermarket is no longer the cheapest option for fresh food products has clearly proved true

Farmer Guy Gaeta has proposed a boycott of major supermarkets because he claims they overcharge consumers and don't pay farmers enough (Pictured, from left, Guy Gaeta with wife Simonetta and son Michael)

Farmer Guy Gaeta has proposed a boycott of major supermarkets because he claims they overcharge consumers and don’t pay farmers enough (Pictured, from left, Guy Gaeta with wife Simonetta and son Michael)

Markets generally have lower overheads, although the growers and small businesses involved face similar or even higher freight costs than supermarkets.

Guy Gaeta, an apple and cherry grower from Orange, in New South Wales’ Central West, who sells in wholesale markets, told the Daily Mail Australia that supermarket prices are much higher than they need to be.

Mr Gaeta urged consumers to boycott major supermarket chains, which dominate food sales in Australia more than in most countries.

While many savvy shoppers already knew that markets are cheaper, thousands of others didn’t.

Many are now reconsidering paying higher supermarket prices they have paid because the major retailers are more convenient and offer online shopping.

The overall cost of living crisis — with prices of energy, groceries, gasoline and housing all rising — also looks set to worsen in the coming months.

That is because from September the petrol price will rise again when the temporary postponement of the fuel excise tax expires.

Supermarket prices for fresh food and meat change weekly in response to supply - including growing conditions - and consumer demand

Supermarket prices for fresh food and meat change weekly in response to supply – including growing conditions – and consumer demand

Meeting on Tuesday, June 5, the Reserve Bank of Australia is being widely tipped to raise spot interest rates by a further 50 basis points – which would be the first time interest rates have risen so much in consecutive months this century.

The spot rate was raised by 50 basis points to 0.85 percent last month. A second consecutive increase of 50 points would bring the spot rate to 1.35 percent.

It was the most significant rate increase since 2000, adding $133 a month to a $500,000 loan over 25 years, and $265 a month to a $1 million loan.

Higher mortgage payments also translate into higher rents.

Why should interest rates go up?

The most fundamental principle of economics is supply and demand.

When supply exceeds demand, prices will fall, but when demand is high and supply is scarce, the cost of products will rise.

Therefore, something rare and in demand, like gold, is expensive, while something lavish like potatoes is relatively cheap.

This rule also applies to money itself.

Huge stimulus from the Australian government during Covid totaling more than a third of a trillion dollars – at a time of record low interest rates – has resulted in more money competing for the same amount of goods and services.

The extra supply of cash is now driving prices up (along with a range of other global factors, including the war in Ukraine and supply chain chaos in the wake of the pandemic).

But by raising the cash interest rate and making it harder to borrow money, it should limit the money supply and help lower prices.

Cold consolation for those forced to pay more on their mortgage.

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