Leaked internal sales data from Coles, the nation’s second-largest supermarket chain, indicates that consumers are feeling the squeeze in their wallets. As inflation and interest rates have been on the rise for over a year, people are cutting back on their weekly essentials, such as kitchen cleaners, body wash, sponges, wipes, and bathroom disinfectants.
The cost of living has been steadily increasing, with interest rate hikes, rising rents, and utility bills putting immense pressure on household budgets. As a result, consumers are becoming more cautious and frugal when it comes to their shopping choices at the supermarket.
Coles’ recent data shows a significant drop in sales for personal health and household cleaning products, which have been traditionally reliable categories. For instance, bath soap and body wash sales have plummeted by 33.3% in the 12 months leading up to May, and hand sanitiser soaps and washes saw a decrease of 29.8% in sales over the same period.
Households, especially those with mortgages or increasing rents, are feeling the financial strain, prompting them to cut back on spending wherever they can. Coles acknowledges that consumers are responding to the rising cost of living by adjusting their purchasing behaviour.
To cater to customers looking to save, Coles is introducing bigger value packs and promotions, including their own brand range, to provide discounts of up to 70% on bulk items, including cleaning and household products.
The impact of cost of living pressures isn’t limited to Coles shoppers; other major retailers like Woolworths are also likely to experience declining sales in certain categories. Commonwealth Bank’s CEO, Matt Comyn, testified before a parliamentary committee, stating that many Australians are facing financial stress in the current economic climate. This has resulted in households cutting back on discretionary spending and relying on accumulated savings.
While many analysts expected discretionary spending to decline, basic essentials sold in supermarkets were thought to be immune from this consumer downturn. However, Coles’ sales data paints a different picture, showing that even items like body wash and kitchen surface spray are being carefully considered by shoppers trying to make their household supplies last longer.
Overall, the data suggests that Aussies are feeling the impact of rising living costs and are making tough choices to manage their budgets more effectively.