The chief executive of Retail Zoo, Nishad Alani, said while the company was well-placed, other companies could be hit hard by rising wage costs, alongside shortages of imported goods.
“We’ll be able to weather the storm, but I think there’s a lot of companies out there that really underestimated the impact of inflation, and what that might do to their business,” he said. “Because wages are going up, costs are going up. And I think you’re going to see some people get hurt through this process.“
Inflation is a massive challenge, and that’s something I expect will continue.
Orica chief executive Sanjeev Gandhi
With shipping costs surging dramatically, analysts at broker MST Marquee said on Friday higher freight costs would affect big importers such as Wesfarmers-owned Kmart and Target, and exporters such as Treasury Wine Estates.
A spokeswoman for Wesfarmers acknowledged the risk of delays but said its inventories were well-stocked. “Although there have been some supply chain disruptions, we are well-placed with inventory in the lead-up to the important Christmas trading period. However, key risks remain around COVID-related restrictions, delays in ports and last-mile deliveries,” the spokeswoman said.
A spokeswoman from Treasury reiterated previous comments that shipping delays were becoming more pronounced, saying it would work with customers to manage these challenges.
Capital Economics economist Ben Udy said higher shipping and import costs would soon feed into higher inflation, and he also predicted faster wages increases. He said this would keep the pressure on the Reserve Bank to tighten monetary policy.
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So far, however, the Reserve Bank has stressed it will be patient, recently rejecting predictions it could hike interest rates next year.
Despite the challenges facing many firms, GrainCorp chief executive Robert Spurway last week said the company had dodged the problems in supply chains because the vast majority of the company’s goods were delivered in bulk, and did not require shipping containers.
