Australia's second-biggest grocer Coles Group has flagged climate change as its next big operational challenge, as floods pushed up prices in the first quarter, lifting sales revenue but squeezing the farming supply chain.
The commentary shows one of the country's biggest companies acknowledging that extreme weather events will likely become more common as the planet warms.
Australia's east coast, home to four-fifths of the population, has endured floods through 2022 that Treasurer Jim Chalmers said were disrupting livelihoods and pushing up the cost of living when he delivered the federal budget on Tuesday.
Supermarket Sales Rise
Coles said supermarket sales rose 2.3% in the three months to end-September, helped by price inflation of 7.1%, nearly double the previous quarter's 4.3%, and added that prices would rise further due to flooding.
"We're very alert to the (fact) that the climate is changing, and we're doing a lot of work around how do we secure supply better, to manage our way through these various things that will ... continue to happen over the next 10 years," Coles chief executive Steven Cain told analysts on a call.
Elsewhere, Australian inflation raced to a 32-year high last quarter as the cost of home building and gas surged, a shock result that stoked pressure for a return to more aggressive rate hikes by the country's central bank.
Data from the Australian Bureau of Statistics (ABS) on Wednesday showed the consumer price index (CPI) jumped 1.8% in the September quarter, topping market forecasts of 1.6%.
The annual rate shot up to 7.3%, from 6.1%, the highest since 1990 and almost three times the pace of wage growth.
A closely watched measure of core inflation, the trimmed mean, also climbed 1.8% in the quarter, lifting the annual pace to 6.1% and again far above forecasts of 5.6%.
That would be unwelcome news to the Reserve Bank of Australia (RBA) which had thought core inflation would peak at 6.0% in the December quarter, with headline inflation topping at 7.75%.
Instead, analysts were warning that both core and headline measures were certain to spike even further this quarter with the ABS's new monthly CPI accelerating in September.
"The upshot is that CPI inflation will approach 8% in Q4," said Marcel Thieliant, a senior economist at Capital Economics.