Australians Cut Back On Meat, Alcohol, And Bottled Water As Cost-Of-Living Pressures Bite

Australians are tightening their wallets and changing what ends up in their shopping baskets, according to Coles' latest sales data covering the three months to the end of March.

Shoppers are cutting back on discretionary items like lollies, alcohol, bottled water, and even reducing their meat consumption as cost-of-living pressures mount, News.com reported.

Coles chief executive Leah Weckert said consumers were increasingly seeking heavily discounted items during their weekly grocery runs, with a clear trend toward value-conscious choices.

"Continued increases in livestock costs impact inflation in meat, particularly across the lamb, pork and poultry categories," Weckert said.

While shoppers trimmed spending in some areas, there was a spike in demand for coffee and cocoa as households prepared for Easter.

"Inflation, excluding tobacco and fresh, moved into deflation at -0.3%, with deflation in the health and home category offsetting continued inflation across categories impacted by higher coffee and cocoa prices, such as confectionery, boxed chocolates and coffee," Weckert added.

Despite the more cautious consumer behavior, Coles Group posted a rise in overall sales revenue, reaching AU$10.4 billion for the third quarter -- an increase of AU$400 million compared to the same period last year, largely driven by its supermarket operations.

Supermarket-specific sales revenue rose to AU$9.4 billion, marking a 3.7% increase year-on-year. Excluding tobacco, the increase was more pronounced at 4.7%. Price inflation across the supermarket segment was 1.5%, or 1.1% when tobacco was excluded.

Coles' liquor division brought in AU$813 million in revenue for the quarter, a 3.4% increase compared to the previous year. However, comparable sales in this segment dipped by 2.0%, a drop attributed in part to the timing of Easter Sunday, which occurred in the previous corresponding period.