By C&I Week

Suppliers to Australia’s supermarkets are making investment in new product development their top priority to drive growth, according to the second UBS – AFGC Supplier Survey.

Australian Food and Grocery Council (AFGC) CEO, Gary Dawson, said the survey reinforced that structural change is underway in Australia’s food and grocery market with retail competition intensifying.

“The survey reflects the difficult domestic trading conditions, with a modest outlook for both sales and profit growth for Australia’s food and grocery manufacturing suppliers.

“It confirms retailer profit margins in Australia are compressing but they remain well above international peers. For suppliers the opposite is true – after years of declining profit share there has been some claw back of margin in the last twelve months, but profitability of Australian suppliers remains well below international peers.

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This story first appeared in C&I Week.