Pinned straw:
It seems money trumps morals, sadly @shadow
The ABC story couldn't have been great for Coles' & Woolies' brands. But at the same time, from a shareholder perspective, they have just highlighted how much pricing power they possess. And unless there's a credible risk we see some regulatory response, I dare say we all just shake our fists at them and keep shopping there. Such is their market omnipotence.
I do find it remarkable that Wollies trades at a PE of 25. Heck, they're at a PE of 20x FY26 forecast earnings! Not timid given analysts are forecasting 6-7% pa EPS growth in the coming years.
Still, the grossed up yield is ~4.3%, and the business is (as evidenced by the ABC story) somewhat inflation resistant with very reliable through-the-cycle earnings. So if you thought rates were coming down and wanted a good defensive allocation in your portfolio, you could do worse.
But I wouldn't expect to average more than an upper-single digit total return, at best, over the coming 5-10 years. There are worse fates than that of course, and for many that's likely a good enough value prop given the low risk nature of the business.
Doesn't seem to be a large increase in gross profit margin now or even expected by analysts?
Cynic in me this is just politicians trying to shift blame - first the RBA Governor and now this.
No hint of cutting back on government spending and the NDIS which is out of control to help fix inflation.