On Thursday, Coles revealed sales at the supermarket chain rose 3.9 per cent on a comparable basis to $8.2 billion over the March quarter, in line with analyst expectations, and that prices had risen consistently through the quarter and would likely keep rising for the rest of the year as inflationary pressures force suppliers to increase the prices of their goods.

Coles is working through a number of requests from suppliers to raise their prices to make up for increased fuel, raw material and commodity costs and shipping and supply chain delays. The vast majority of these requests had been made by suppliers for the very first time, Cain said.

Inflation at the retailer’s supermarket division rose 3.3 per cent from January through to March, a significant jump from the prior quarter when Coles reported deflation of 0.2 per cent, though the chief executive highlighted Coles’ level of inflation was lower than the national average and the company was making efforts to try and curtail the level of price hikes it was passing through.

“The job of a good retailer is not just wave everything through, you do need to work on behalf of your customers,” he said.

However, Cain said he expects price hikes from suppliers to continue through the fourth quarter and into the next financial year, noting they had been increasing at a steady rate throughout the third quarter and the supermarket was still in discussion with a number of suppliers.

In a situation reminiscent of the early days of the pandemic, Cain also acknowledged that some shoppers may be finding toilet paper in short supply in some stores, though this was due to logistical challenges rather than supply issues.

“Toilet paper has been a bit up and down in terms of supply. It’s a combination of factors, it’s a very bulky product to ship around and transport is hard to come by. And sometimes the bulk paper is coming from overseas,” he said. “But we’ve got plenty in the pipeline and arriving this week.”

Coles booked a number of significant costs through the quarter, including $65 million in COVID-related expenses relating to isolation requirements for staff members and the cost of distributing rapid antigen tests.

The supermarket also reported $30 million in costs due to the floods in NSW and Queensland, which led to 130 stores being closed and logistics in and out of the state heavily affected.

Shares in the retailer gained 0.5 per cent on Thursday to $18.46, with Jarden analyst Ben Gilbert labelling the result as “solid”, though noted costs were higher than expected and that trading through the current quarter could still be disrupted.

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