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Speaker 1: Well, it looks like food prices are still feeling a

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Speaker 1: bit of the pressure, aren't they. Grocery supplyer costs to

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Speaker 1: supermarkets have gone up again, this time by two point

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Speaker 1: one percent for the month of November, according to Infometrics.

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Speaker 1: This is according to Informetrics and food Stuff's monthly Index,

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Speaker 1: and the chief executive of Infometrics, Brad Olson, is with us.

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Speaker 2: Now morning Brad, good morning.

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Speaker 1: Do you worry about that when you look at this

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Speaker 1: you worried about inflation at all? Have we got a

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Speaker 1: problem like Europe? Scott?

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Speaker 2: I don't think it's quite like Europe's gotten And I mean,

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Speaker 2: am I worried after the last couple of years almost always?

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Speaker 2: I think we're still quite scarred from that. There has

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Speaker 2: been a slight re acceleration, a slight change in trend,

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Speaker 2: with the grocery supply costs index now up two point

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Speaker 2: one percent. That's ever so slightly faster than what we

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Speaker 2: saw last month at two point zero. But to be fair,

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Speaker 2: the fact that we're sort of bobbling around the two

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Speaker 2: percent mark is a lot better than sort of a

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Speaker 2: year year and a half ago when we were seeing

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Speaker 2: double digit increases. So still a little bit of caution there,

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Speaker 2: and I think the big change here there has been

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Speaker 2: that go back sort of two years ago and you

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Speaker 2: had inflation across the board just about everything was increasing

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Speaker 2: in cost, whereas now it's a little bit more specific.

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Speaker 2: So yeah, there's a few pockets of pressure, but it's

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Speaker 2: more on specific items or specific areas rather than that

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Speaker 2: across the board sort of hit. So a little bit

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Speaker 2: more comfort there, but still always a little bit worried

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Speaker 2: as we head into the silly season around those sort

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Speaker 2: of pressures that are out there on the economy.

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Speaker 1: Right, so specifically the groceries. What's putting this up.

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Speaker 2: There's a few things that we've seen, particularly in the

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Speaker 2: November figures, there were a few high cost increases coming

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Speaker 2: forward for the likes of bakery and chilled goods that

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Speaker 2: seemed to be driven by dairy particularly, you know, the

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Speaker 2: likes of butter and similar that has come up Internationally.

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Speaker 2: There's not quite as much milk supply into the system,

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Speaker 2: but there's still pretty healthy levels of demand, so that's

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Speaker 2: been pushing prices up. That of course has been good

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Speaker 2: for farmers in recent times, but at the same time

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Speaker 2: it's meaning that we're all having to pay a bit more.

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Speaker 2: The last couple of months, we've also seen the likes

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Speaker 2: of cocoa prices that have been increasing internationally because there's

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Speaker 2: been less coco being produced that's push prices up, and

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Speaker 2: the same with olive oil. So again a few more

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Speaker 2: sort of specifics and often around those supply and demand dynamics.

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Speaker 1: Listen, Brad, just just on the OCR. I've been having

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Speaker 1: some chats over the weekend with people who are involved

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Speaker 1: in retail and various other businesses, and every single one

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Speaker 1: of them keeps saying to me, this is the worst

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Speaker 1: economic conditions we've ever seen, worse than the GFC hardesting

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Speaker 1: and we've ever been through. And we're not seeing a

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Speaker 1: pick up in retail spending at the moment right, So

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Speaker 1: clearly we are an economy still under pressure. I can't

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Speaker 1: help but shake. I can't shake the feeling that the

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Speaker 1: Reserve Bank is making a massive mistake leaving us for

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Speaker 1: three months with the OCR setting where it is.

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Speaker 2: What do you think, Well, I think we're actually seeing

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Speaker 2: some earlier signs of the economy packing up a bit fast.

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Speaker 2: I mean, look, it always takes time for the official

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Speaker 2: cash rate to come through, but the likes of Worldline

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Speaker 2: were reporting last week that the first week first seven

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Speaker 2: days of December did see a pickup in retail spend

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Speaker 2: compared to the year before. The Likes of Cards data

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Speaker 2: out last week from Stats in z for November it

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Speaker 2: was broadly flat, you know, you know, there wasn't a

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Speaker 2: lot of a pack up there, but also it wasn't declining.

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Speaker 2: I think the challenge, though, Heather, is that even if

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Speaker 2: the Reserve Bank moved, you know, a huge amount more

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Speaker 2: with the official cash rate, even before this three month

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Speaker 2: break that they're taking for a lot of people, they're

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Speaker 2: still locked in for probably a good another six months.

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Speaker 2: So unless they're going to pay some pretty significant break

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Speaker 2: free fee, you're not going to see a huge, huge shift.

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Speaker 2: So I feel like we're trying to navigate a very

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Speaker 2: difficult position where for the next couple of months we've

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Speaker 2: got just that sort of time delay while people start

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Speaker 2: to refix. Then things will definitely come through, But until

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Speaker 2: those people make it to their next refixed point, there's

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Speaker 2: a lot of pressure, a lot of concerns still to

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Speaker 2: go under the bridge. So that's where I think that

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Speaker 2: idea that there are better economic times coming is very

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Speaker 2: much true, but it's just we're not quite there yet.

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Speaker 2: We're just going through the sort of the time delay.

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Speaker 1: Yeah, good stuff. Hey listen, thanks for running us through that.

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Speaker 1: Brad Olson, Infometrics, Chief Executive.

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