Coles reports strong supermarket sales growth in first quarter

Coles has posted an uplift in sales for the first quarter, driven by a strong performance at its supermarket segment.

The company’s sales for the 13 weeks ended September 28 rose 3.9 per cent year-on-year to $10.9 billion. 

All of the growth was driven by the supermarket segment, where sales increased 4.8 per cent to $9.9 billion. 

Excluding tobacco, supermarket sales rose 7 per cent, underpinned by a focus on range and value, further improvements in availability, and a 28 per cent e-commerce sales growth.

“We continue to see a dynamic competitive market and are tailoring our pricing architecture in certain categories to cater for the changing landscape, including expanding the number of products within our every day low price (EDLP) range,” the retailer said.

Sales of tobacco dropped 57 per cent due to new legislation and growth in the illicit market. Exclusive to Coles sales increased by 5.3 per cent. Supermarket price inflation excluding tobacco moderated to 1.2 per cent from 1.5 per cent in the preceding quarter.

At the liquor segment, sales slid 1.1 per cent to $842 million amid ongoing softness. The ‘other’ segment, relating to the product supply agreement with Viva Energy, saw sales drop 17.9 per cent to $156 million.

On a comparable basis, Coles’ sales remained flat for the quarter, with a 4.6 per cent increase at the supermarket segment offset by a 1.4 per cent decrease at liquor.

“We are pleased with our performance over the quarter with supermarket sales growth reflecting the focus we have had on value, quality and the customer experience,” said Coles Group CEO Leah Weckert.

“We continue to see positive results from our major transformation projects, with availability reaching its highest levels since pre-Covid and e-commerce sales penetration reaching 13.3 per cent.

“In liquor, we made significant progress with our ‘Simply Liquorland’ banner simplification, making our network more accessible to a broader audience and delivering a positive impact on sales,” Weckert added.

In the early part of the second quarter, Coles said supermarket sales growth has remained at similar levels to the first quarter, while the liquor market continued to be challenging with consumers remaining budget conscious.

“We have designed our Christmas range to cater for every taste and budget, and we are continuing to focus on our omnichannel customer experience to enable customers to shop with ease either in store or online during this busy period,” Weckert said.

Earlier this week, Coles’ rival Woolworths reported a 2.7 per cent increase in Q1 group sales, with grocery sales up 2.1 per cent.

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