2 grocer Coles Group Ltd flagged climate change as its next big operational challenge on Wednesday as floods pushed up prices in the first quarter, lifting sales revenue but squeezing the farming supply chain.
Coles shares fell 3% by mid-session, against a flat overall market, as analysts weighed the impact of inflation, which economists also blame on soaring energy prices, on profit growth.
Shares of larger rival Woolworths Group Ltd, which reports September quarter sales on Nov. 3, were also down 3%.
At its annual meeting, Woolworths CEO Brad Banducci said inflation remained a concern and the company expected the operating environment to remain challenging.
With Australian inflation at a 32-year high of 7.3% in the September quarter, Coles CEO Cain said cost of living pressures were changing customer behaviour, with lower-income shoppers buying less fresh produce and more canned goods, and “catering in bulk” to reduce food waste.