Coles joins supermarket counterattack against politicians for weaponising cost of living crisis

Coles chair James Graham has joined the counterattack against politicians who have weaponised the cost-of-living crisis against supermarkets after leaning on the grocers during the pandemic and natural disasters.

Mr Graham also used a marathon annual general meeting in Sydney to defend Australia’s second-biggest supermarket chain against accusations of profiteering and price-gouging amid rising household pressures that threaten to become an election issue.

The political pressure has been stoked by nine government and regulatory reviews into the sector in the past 12 months and a lawsuit by the Australian Competition and Consumer Commission alleging Woolworths and Coles misled customers by offering fake discounts on groceries.

Mr Graham told shareholders on Tuesday that with 1800 stores and 115,000 staff serving 14 million customers a week, Coles was “well aware of the economic pressures on customers and we continually seek to find ways to respond and build customer trust.

“In this context it has been disappointing to see how cost-of-living issues have been politicised and targeted at supermarket operations,” he said.

“This is in sharp contrast to the level of engagement and support of supermarkets by governments and regulators during the COVID lock down years.

“That experience and the results of working together in the face of floods, bushfires and other natural disasters have shown the benefits of constructive engagement between business and governments, which is hopefully the template for the future when it comes to addressing the impacts of complex issues like inflation.

“We are fully co-operating with all of the inquiries that are being undertaken, but I do think there has been a wider ambition of some behind those inquiries to seek to provide answers to more difficult issues which have been arising from, as I mentioned, inflation, which has been seen at earlier times.”

The comments echo those delivered to the AGMs of Woolworths and Wesfarmers in the past two weeks, with the latter’s chair Michael Chaney accusing politicians of bashing big business to curry favour with voters, saying “profit seems to be a dirty word”.

Mr Graham reinforced Coles’ rejection of the ACCC allegation, insisting the group aimed to deliver genuine discounts and promotions.

“The matters raised by the ACCC relate to a period of significant inflation, leading to a sharply increasing level of super cost price increases,” he said.

“The subsequent discounts offered to shareholders on these items were the result of promotional investment by the supplier and Coles which delivered a reduction in the shelf price at a time when households were under significant cost-of-living pressure.

“We are very conscious of the significance of these allegations, as they go to the heart of customer trust.”

The AGM ran for a lengthy four hours as Mr Graham and the company were grilled by environmentalist activists about food produced from deforested areas and the use of salmon farmed in Tasmania’s Macquarie Harbour at the threat to an endangered species.

Questioners warned the group about the reputational risk of not acting immediately on the issues.

Mr Graham said they are being addressed by the company but acknowledged perhaps not in the timeframe being demanded by critics.