E-commerce

Coles sees sales growth, with e-commerce channel sales increasing

Coles has reported a 3.6 per cent increase in group sales at $44.3 billion, with its EBITDA rising 11 per cent to $3.9 billion for the current fiscal year.

The group’s net profit after tax rose 2.4 per cent to $1.07 billion.

Sales growth was driven by the strong performance of its supermarket segment, which grew 4.3 per cent to $40 billion.

Coles’ supermarket segment’s EBITDA rose 9 per cent, from $2 billion to $2.1 billion, and the segment’s gross margin was up from 26.6 per cent to 27.4 per cent year-on-year.

The group’s supermarket sales revenue was supported by strong volume growth across transactions and basket sizes, with customers responding positively to its seasonal ‘Great Value, Hands Down’ value campaigns.

The company’s positive performance across Christmas, Easter, Halloween, and Mother’s Day, and its collectible and continuity programs, including the Curtis Stone Glassware and Harry Potter Magical Discs campaign, underpinned Coles’ supermarket results for this financial year.

Coles’ e-commerce performance in the supermarket segment rose 24.4 per cent to $4.5 billion, with penetration increasing to 11.2 per cent, driven by digital campaigns, Black Friday, Coles Fest, and its May Mega Sale.

The group’s liquor segment reported a 1.1 per cent increase in its sales revenue at $3.6 billion, with its gross margin remaining flat at 23.5 per cent, while the segment’s EBITDA decreased 8.6 per cent, dropping from $133 million to $113 million year-on-year.

Coles attributed the performance of its liquor segment to continuing cost-of-living pressures, but saw positive impacts in the segment’s sales due to new store openings, its Tasmanian acquisition, good performance across Christmas and Easter, and curating its wine category to local customer preferences.

The liquor segment’s e-commerce channel saw an increase in sales revenue by 7.2 per cent, with penetration increasing to 7.4 per cent, supported by campaigns, Cyber Week, and Click Frenzy.

The company’s simplified ‘Simply Liquorland’ banner pilot was positively received across selected stores in SA, Victoria and Queensland.

“We were clear that value, quality and availability remained important to our customers,” said Coles group CEO Leah Weckert.

“In addition, continuing to manage loss and delivering on our Simplify and Save to Invest commitments remained key to achieving our financial objectives.

“We made good progress in each of these areas, resulting in increased customer satisfaction scores and earnings growth.

“At the same time, we delivered several major milestones in our capital investment program, including the launch of our Kemps Creek automated distribution centre (ADC) and two customer fulfilment centres (CFCs), and these investments are already delivering results,” said Weckert.

Moving forward, Coles will deliver its ADC program’s first full year of annualised benefits and continue to focus on cost control as part of its Simplify and Save to Invest program.

Coles’ ‘Simply Liquorland’ is expected to be completed by the third quarter of the next fiscal year and incur a one-off cost of approximately $20 million.

The company expects to open approximately 19 new liquor stores, close 25 stores, and renew around 130 stores, inclusive of the remaining ‘Simply Liquorland’ conversions.

Coles plans to open about 12 supermarkets, renew around 70 stores, and close two supermarkets.