Coles online sales surge as capacity almost doubles
Online proved a key growth driver for Coles over the last financial year, after the company almost doubled its online capacity.
Coles this morning reported a bumper result despite huge impact from the Covid-19 pandemic and the bush fires, increasing profit growth for the first time in four years, up 7.1 per cent to $951 million.
Earnings before interest and tax grew 4.7 per cent to $1.76 billion across the group, despite significant losses in Coles Express and high costs as a result of the pandemic.
Coles’ online capacity was boosted by the roll out of contactless Click & Collect, the launch of Coles Online Priority Service (COPS) and a relaunch of coles.com.au and all three of its liquor businesses’ websites.
Online revenue grew by 18.1 per cent for the year despite a temporary disruption to services at the height of stockpiling in March and April.
“Despite the significant drag on profitability as a result of the temporary suspension, Online contributed a modest profit to Supermarkets for the year,” the retailer said.
Coles CEO Steven Cain said 2020 had provided the “greatest test” with drought, bushfires and the Covid-19 pandemic bringing unprecedented challenges.
Coles’ convenience business suffered a $16 million loss during the year, as lockdowns reduced foot traffic; while the pandemic added costs of $170 million in Q4 related to cleaning, security and labour.
However, the retailer benefited from strong demand at its supermarkets throughout the year, with sales of $33 billion for the year, an increase of 6.8 per cent on FY19, with comparable sales growth of 5.9 per cent.
While Cain said supermarket sales have remained strong for the first six weeks of FY21, Covid-19-related costs are expected to remain high.
“I don’t think anyone knows what’s going to happen in six months’ time,” Cain said.