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January 7, 2011

AUS: Queensland floods will help push up grocery prices, says retail chief

The floods in Queensland will lead to grocery prices rising as they follow wet weather elsewhere in Australia in recent weeks, the head of the country's retail association has told just-food.

By Dean Best

The floods in Queensland will lead to grocery prices rising as they follow wet weather elsewhere in Australia in recent weeks, the head of the country’s retail association has told just-food.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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Ken Hendrick, the chief executive of the National Association of Retail Grocers of Australia, said the state of Victoria had endured heavy rain in December, hitting crops there. Wheat, canola, barley and fruit and vegetable crops had been affected in Victoria, he explained.

Hendrick also predicted that the floods in Queensland could lead to flooding further south in the state of New South Wales, putting more pressure on supplies.

“While there is still serious flooding in parts of Queensland, the waters are now moving south from the top end of the Murray-Darling Basin into New South Wales, where there could be further flooding. The Murray-Darling Basin produces about 40% of Australia’s domestic food supply,” Hendrick said today (7 January).

“All in all, we would certainly expect price rises to result from all of these events up and down the east coast mainland states.”

The NARGA chief, however, said the impact on prices was still unclear and estimated that it could be “a couple of weeks” before consumers saw price increases in retail stores. Hendrick said some foodstuffs would not be affected, pointing, for instance to bananas, which are mainly produced further north in Queensland and away from the areas affected by the floods, the worst seen for 20 years.

However, Hendrick said he expected prices for “grain-based products” to rise. He said: “Queensland industry group AgForce, which represents mainly grain growers, has estimated that crop losses might be worth A$1bn, or around 0.07% of GDP.”

He added: “There may also have been some stock losses and the floods have probably prevented dairy cows from being milked and/or milk from being transported to dairies. Again, the impact on prices for meat and milk products is not yet evident. There have been reports of serious damage to fruit and vegetable crops.”

While there are fears that the average Australian consumer could face a more expensive shopping bill, Hendrick said other states could plug the lost production in Queensland.

“Of course, if prices for domestic produce and products rise significantly, it doesn’t mean people will spend more on their weekly grocery bill: they may buy imports or go without or perhaps other regions of Australia may be able to meet some of the demand,” he said.

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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