By Stuart Condie

SYDNEY--Shares in Australia's two dominant supermarket operators climbed after the country's competition regulator said it couldn't confidently say whether their prices and margins were excessive.

Woolworths and Coles were the S&P/ASX 200 index's best-performing stocks after an hour of Friday's session, rising about 5% and 4%, respectively.

The early gains added about 2.71 billion Australian dollars, equivalent to US$1.71 billion, to their collective market capitalizations.

The surge came hours after the Australian Competition and Consumer Commission published a report in which it said that Woolworths and Coles appeared to be among the most profitable global supermarkets.

The ACCC published a raft of recommendations focused on improving pricing transparency and boosting competition. It said that not all price increases since 2019 appeared attributable to inflation, but stopped short of accusing the grocery giants of price gouging.

"It would be challenging to determine whether supermarkets' retail margins at the product or category level are excessive," the ACCC said. In any case, charging high prices is not illegal, it added.

Woolworths said that it would carefully consider the report's findings and recommendations.

"We welcome recommendations that improve transparency for customers where they don't have unintended consequences or increase costs," Woolworths CEO Amanda Bardwell said.

Shares in Woolworths were last up 4.9% at A$29.53. Shares in Coles were last up 3.8% at A$19.26.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

March 20, 2025 20:22 ET (00:22 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.