Tony Galati’s Spudshed wears soaring costs as supermarket chain faces supplier demand for price rises

Tony Galati says his Spudshed supermarket chain is absorbing majority of soaring costs triggered by the Iran war because crunched consumers can no longer afford to pay more for their groceries. Just like nation’s two biggest grocery chains, Mr Galati told The West Australian suppliers have approached Spudshed requesting higher prices for their products to cope with the impacts of soaring fuel costs rippling from farms to supermarket shelves. Despite seeing the price of packaging explode alongside petrol and diesel that is ratcheting up the cost of transporting goods around the State, he said he had no choice but to wear the higher costs being passed onto Spudshed. “We’re in a situation where we can’t lift our price, we have to wear the cost,” Mr Galati on Wednesday said. This included about a 20 per cent price increase on packaging since the war started at the end of February. “We understand the (cost of living) pain,” he said. “Where we can, we will put our prices up a little bit but in produce, we can’t because there’s a lot of supply (that we need to sell) and it seems like people are eating less fruit and vegetables.” Mr Galati warns if fuel prices “keep going up and up then we’ll have to really slow production down and plant less”. “The problem that we’ve got is we grow a lot of carrots for export and a lot of other people are in the same boat who’ve got all these carrots meant be sent to the Middle East and we can’t send them across,” he said. “It’s thousands of dollars of carrots being wasted. We’ll end up feeding them to the cows.” Woolworths has confirmed it had received a handful of formal requests from suppliers asking for higher prices on their goods. Woolworths is working through requests to increase prices on a case-by-case basis. Coles has also confirmed suppliers have asked for price increases. “In an environment where Aussie families are facing rapidly increasing cost of living pressures, retailers and suppliers have a careful job to sustainably manage growing cost pressures, while also trying to reduce the full impact on shoppers,” a Woolworths spokesman said in a statement recently. “We need to strike the right balance of supporting the viability of our suppliers and transport partners while advocating for our mutual customers to help buffer the impact on them at the checkout.” A Coles spokeswoman said the supermarket giant’s first priority was to “mitigate any change from flowing through to the shelf”. “Coles’ long-term, direct relationships with suppliers, including Australian farmers, mean we are able to work with them to manage their own cost pressures, support continuity of supply, and smooth the impact on consumers,” she said.