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The chief executives of Australia’s two largest private employers have thrown their support behind an increase in workers’ wages amid persistently rising inflation and a tightening labour market.
Woolworths boss Brad Banducci and Wesfarmers managing director Rob Scott both made comments on Tuesday supporting wage rises, with Banducci backing calls from industry body the Australian Retailers Association for an increase in the minimum wage in line with the underlying rate of inflation.
Woolworths CEO Brad Banducci has backed a proposal to raise retail workers wages.Credit:Wolter Peeters
Scott, who oversees the operation of major retailers Bunnings, Kmart and Target, told the Macquarie Australia Conference he expected to see rising wages “across the board” in the year ahead, something he welcomed in light of the rising level of inflation.
“From a Wesfarmers point of view, I see real wage growth as a very good thing. Real wage growth is a good thing for the economy, and if it’s good for the economy, it’s generally good for Wesfarmers,” he said.
Banducci, whose company employs about 200,000 Australians, was also supportive of wage rises, though noted that there was no “silver bullet” that would fix Australia’s inflation woes. The retailer said shoppers could be facing a double whammy of price rises from suppliers in the next 12 months.
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“We’re very clear that while we need to deliver value for our customers, we also need to make sure that our team can have salaries and wages that keep pace with the underlying increase in the cost of living,” Banducci said.
The supermarket boss said so far around 40 per cent of the company’s supplier base had requested price increases, and the supermarket was in negotiation with an additional 20 per cent. At Woolworths’ third-quarter sales results on Tuesday, the company reported inflation across its food business of 2.7 per cent, lower than rival Coles’ 3.3 per cent.
“There are indications from some of our larger suppliers that within 12 months, they will come back for a second cost increase,” Natalie Davis, Woolworths’ head of supermarkets told analysts. “That’s really reflecting the ongoing cost pressures they’re seeing on commodity prices, manufacturing costs and international freight.”