The search for value on supermarket shelves is about to get a whole lot more interesting – with the retail bosses themselves taking up the cudgels on behalf of consumers.

Coles chief executive John Durkan launched a report commissioned by the retail giant on the cost of living pressures faced by Australians – and attacked a number of multinational food and beverage manufacturers saying they “seem happy to charge Australians more for their products than is the case in overseas grocery markets.”

Mr Durkan said the report showed 40 per cent of Coles’ customers spent only $150 a week on a family of four. But the report, undertaken by Nera Economic Consulting,also found the cost of living had increased for all households but the impacts were greater for low-income households.

Surveys of consumers indicate while the majority of households have responded to cost of living trends by reducing their consumption of non-essential goods, and some are cutting back on essential goods like food .

For households in the bottom income quintile, the cost of living was estimated to have gone up by 8 per cent, against a 6.2 per cent increase in the wealthiest households.

Meanwhile, both Coles and Woolworths are battling it out over the $147 billion dollar water and soft drinks category, trying to force Australia’s biggest beverage company, Coca-Cola Amatil, and other water bottlers to cut their lines and prices.

In Australia, the category is worth nearly $800m and has witnessed explosive growth, driven mostly by private label waters and the local power brand, CC Amatil’s Mount Franklin.

In more good news for consumers, reports suggest that local stores will struggle once Amazon arrives – with consumers the big winners.

According to the Australian Financial Review, not only are they in line for cheaper goods, the world’s largest online retailer could help keep a lid on inflation and make it difficult for the central bank to raise the official cash rate.

All eyes this week were on the prospects for a loan rate hike, and what it would mean to those who thought they had lucked in to owning their own homes.

Nicole Pederson McKinnon, writing in Fairfax’s Money Section, made this sobering prediction about the difference of a loan rate rise today and almost 40 years ago:

“For repayments, 8 per cent would mean an average $2933 a month or $35,196 a year … 44 per cent of income. Back in the 1980s, mortgage payments reached the same painful proportion of income at $968 a month or $11,616 a year – though remember a straight dollar comparison with today is pointless because of inflation.”

But a new report shows home owners could soon be in a minority. The proportion of home owners declined in 87 per cent of Greater Sydney neighbourhoods between 2011 and 2016, according to the Grattan Institute.

The slump in home ownership rates coincides with soaring property prices and rising population density in many Sydney districts. The median price for a detached house in Sydney reached $1.18 million last quarter after surging more than 80 per cent in the past five years, Domain Group figures show.

The overall rate of home ownership in the Sydney metropolitan area (including those who own outright or with a mortgage) fell from 65.2 per cent to 62.3 per cent between 2011 and 2016. Sydney’s rate is now more than 3 percentage points lower than the national average.

Finally, we commend this piece from the media site Mumbrella on a column by Sunrise commentator and economics columnist David Koch on saving money:

“Dr Mumbo always eats lunch at his desk, so you can imagine his joy when he discovered this was the path to wealth. In today’s edition of The Daily Telegraph, Libby & David Koch told readers they could save 50 dollary-doos a week by simply thinking ahead and bringing their own tasty treats to work.

“That’s $2,600 a year,” Dr Mumbo hears the mathematically-inclined among you thinking.

Not so, according to the formidable pair at MoneyHQ.

How much do you spend on egg sandwiches Kochie?

“It’s hard to buy a sandwich and a drink for less than $10,” the article says. (‘Incorrect’, thinks Dr Mumbo as he takes his egg sandwich through the Woolworths checkout – but he reads on anyway. Surely there will be some economic wisdom in here.)

“Plan ahead when you do the weekly grocery shop and take a packed lunch to work. Save $50 a week, $200 a month, $10,000 a year.”

Dr Mumbo is no economist, but no matter how many times he did the calculation, he could not make $50 x 52 (weeks), or $200 x 12 (months) equal $10,000. Perhaps that’s why Kochie, and not Dr Mumbo, fronts Australia’s favourite breakfast show.

“Still, thinks Dr Mumbo, $2,600 isn’t bad. It’ll get Dr Mumbo at least two houses in Sydney, according to Domain, with money left over for egg sandwiches. Imagine how much he could do with $10,000…..


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