The Challenge of Falling Grocery Inflation for Suppliers
Both Coles and Woolworths released their FY24 results last week and, while there has been much discussion about the headline sales and profit results, the numbers that caught my eye were the grocery inflation figures that Coles reported.
Shelf prices increased by 1.5% p.a. in the second half of FY24, down from 2.9% in the first half and a whopping 6.9% in FY23.
While this is making it difficult for suppliers to justify price increases, the good news is that lower commodity prices and an improving labour market will help ease margin pressure.
Transformation through simplification
Simpler food and beverage businesses can be easier to operate, more efficient and more profitable.
But is simplification always possible? And how do you go about simplifying a complex business? In this article, we will provide answers to these questions and provide a roadmap for transforming your business through simplification.
Three levers for rapid cost reduction
Over the past 12-months, operating conditions in the food and beverages sector have been challenging. Consumer demand has softened, borrowing costs remain high and retailers are pushing back against price increases.
Sadly, we are seeing more food and beverage companies tipped into voluntary administration as a result of these challenges.
As a result of this, many in the industry are asking what they need to do to avoid a similar fate.
With price increases mostly off the table, and limited growth, the main option is to focus on cost.
In the hope it might benefit your business - we would like to share our approach to rapid cost reduction.