Coles May Increase Prices Of Cleaning Products, Sauces And Electrical Goods By 10%
- Coles in talks with suppliers to raise prices of second tier grocery items
- Cleaning products, shoe polish, stationary and light bulbs could increase
- Each may increase by 10 percent, increasing earnings by $10 million
- Citi analyst Craig Woolford said the move was ‘surprising’
Coles is talking with suppliers about raising the price of cleaning products, sauces, light bulbs and other grocery items, according to a leading analyst.
The grocery chain is interested in raising the cost of such items – also including shoe police, stationary and other electrical goods – by 10 percent, Citi analyst Craig Woolford told the Sydney Morning Herald.
Mr Woolford said it is surprising move for Coles, who began talks with suppliers this month.
By raising the prices, Coles would increase its earnings by just $10 million to $30 million (stock image)
‘Perhaps Coles has felt margin pressure from some of its investment in private label and high-profile branded price reductions,’ he said.
By raising the prices, Coles would increase its earnings by just $10 million, Mr Woolford said.
‘For such a small financial benefit, we are somewhat puzzled by the feedback,’ he said.
An anonymous supplier told the SMH that Woolworths attempted the same tactic a couple of years ago but shoppers ended up going to other stores in search of cheaper products.
‘It’s normally the second-tier items that people don’t notice, that fund the markdowns on $1 milk,’ the supplier said.
Mr Woolford said it is a surprising move by the grocery chain for a small profit (stock image)
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