👉 Background: Aussie households have been struggling with rising interest rates and higher costs for everyday essentials. We've seen the cash rate increase by 3.25% in less than 12 months and inflation jump to 7.8%.
👉 What happened: Now, the Australia Institute’s Centre for Future Work claimed that Aussie businesses have increased prices by $160 billion a year above their costs.
👉 What else: In other words, if businesses had not passed through “excess profits” into consumer prices, then inflation would have averaged only 2.7 per cent since 2019. And this raises a big question of corporate profiteering.
💡Profiteering is the practice of making - or seeking to make - an excessive or unfair profit. And Australian supermarkets have been accused of playing their part.
💡The profit margins and net profit of the supermarkets have certainly risen since the pandemic:
💡Interestingly, in the UK, major supermarket chains have been forced to discount more heavily to defend their market share against discounters like Aldi. But it hasn't quite hit our shores yet...
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