Raising grocery prices at a time when consumers are already feeling the pinch has landed supermarket duopolists Coles and Woolworths an unwanted gong in Choice’s annual Shonkys awards.
The consumer group called the pair out for cashing in during a cost-of-living crisis, as the billions of dollars in profits raked in grate with customers struggling to survive rising inflation and interest rates.
Coles posted an annual profit of $1.1 billion this year and Woollies reported $1.62 billion in full-year profit after tax, up 4.6 per cent from the prior year.
‘Rather than doing the right thing by consumers, our Shonky winners have only disappointed during this difficult time,’ Choice chief executive Alan Kirkland said.
‘In a nationally representative survey Choice conducted in September this year, more than 60 per cent of shoppers believe the big two are making a lot of money from the price hikes, and less than 20 per cent think Coles and Woolworths are doing enough to keep prices low.’
But a Coles spokesperson said the claim ignores the company’s slim profit margin and the supermarket is committed to reducing prices for shoppers.
Down, down or up, up. Coles has been outed by Choice for raising prices while making big profits.
‘For every $100 a customer spends, Coles makes $2.60,’ the spokesperson said.
E&P Capital retail analyst Phillip Kimber at the time said Coles’ profit result was two per cent lower than consensus expectations and would be negatively received by shareholders.
Griffith University consumer spending expert Graeme Hughes said Coles and Woollies claim their increased profits are due to maximisation of internal operations and efficiencies but consumers have a right to question whether they have been treated fairly.
‘I would say that most businesses have been putting profits before people and there hasn’t been a lot of consideration for where that’s going to lead them in the longer term,’ he told AAP.
A Woolworths spokesperson said the company is acutely aware of the pressure placed on customers and is doing more everyday to help customers spend less.
Online retailer Kogan received a Shonky for ‘tricking’ customers into a $99 sign-up for a subscription service they didn’t realise they were paying for.
Choice claims customers were caught out when buying items online that provided an option for free shipping when, unbeknownst to them, the auto-ticked box had signed them up for the unwanted Kogan First subscription.
A Kogan spokesman encouraged customers to check out the value provided by the subscription and make up their own minds.
‘On average, Kogan First members get more than $160 of additional value each year – smart shoppers choose Kogan First,’ he said.
Ukonic received the dubious Choice award for their Xbox mini fridge, made in partnership with Microsoft, that was found to not actually make things cold.
The group also took aim at two whole sectors for failing consumers.
RentTech companies – third-party online rental platforms that connect potential tenants to landlords – were called out for ‘data gouging’ people desperate to find a home amid a rental crisis.
Personal alarms designed to provide loved ones with piece of mind about the safety of elderly and vulnerable relatives were castigated for being unreliable and hard to use.
‘I would put it akin to the seatbelt in the car not working,’ Mr Hughes said.
Ukonic has been contacted for comment.