Coles and Woolies release third-quarter results

Each of the ‘big two’, Coles and Woolworths, reported third-quarter growth in supermarket sales, according to their latest results.

Coles says it delivered a “solid outcome”, while also enjoying growth in Coles Online of 27 per cent.

Woolworths hailed its own “sales momentum” and, like Coles, clocked up impressive growth in online sales (35.1 per cent).

Coles’ sales performance highlights

  • Supermarket sales grew 3.2 per cent in the third quarter of the 2019 financial year. A “successful” Fresh Stikeez promotional campaign supported this growth, Coles says, by driving up customer engagement.
  • Coles Online grew by 27 per cent with sales of more than $1 billion on a rolling 12-month basis.
  • Liquor comparable sales adjusted for New Year’s Eve timing increased 0.9 per cent. There was “continued strong growth” in Exclusive Liquor Brands in the wine category.
  • There was “strong growth” in Coles Express food to go, despite the impact of year-on-year fuel-volume declines.

Coles’ strategic milestones

Coles also listed what it called its “strategic milestones”:

  • It began a new alliance agreement with Express’ fuel partner, Viva Energy, to restore growth in the Express business.
  • Coles entered into an incorporated joint venture with Australian Venue Co in relation to Coles’ hotel and retail liquor business in Queensland.
  • It began trials with eBay and Uber Eats.
  • It entered into a strategic partnership with Optus to deliver high-speed broadband to all stores.

Coles Group CEO Steven Cain said: “We delivered a solid outcome for the third quarter. We know that customer expectations are changing faster than ever. We’re resolutely focused on delivering our Fresh Tomorrow strategy.

“We were also pleased to provide support for communities affected by natural disasters.”

Woolworths’ sales performance highlights

  • Australian Food’s sales momentum “improved” in the third quarter. Easter-adjusted sales growth of 4.7 per cent (Easter-adjusted comparable sales: 4.2 per cent) benefited from “lower deflation and more settled weather”.
  • Customer scores “remain high”, says Woolworths, but were affected by flood and drought. Poor weather also affected the prices, quality and availability of fruit and vegetables.
  • Endeavour Drinks’ Easter-adjusted sales increased by 6.4 per cent. The timing of New Year’s Eve, and the weather, assisted the “positive comparable growth” of BWS and Dan Murphy’s.
  • New Zealand Food Easter-adjusted sales grew 2.9 per cent, with online growth a highlight.
  • BIG W’s Easter-adjusted sales increased by 5.6 per cent, thanks to Everyday, Leisure and Home.
  • Bars and Food boosted Hotels sales, with Easter-adjusted growth of 2.7 per cent.
  • Group Online sales grew of 35.1 per cent.
  • Successful sale of Woolworths Petrol to EG Group created $1.7 billion, which went back to shareholders.

Woolworths Group CEO Brad Banducci said: “We’re pleased with the improvement in sales momentum across the Group in Q3. Australian Food comparable sales growth of 4.2 per cent (Easter-adjusted) was a particular highlight after a challenging first half.

“After slower sales growth in H19, Endeavour Drinks’ sales momentum improved in Q3 with Easter-adjusted comparable growth of 5.9 per cent.

“As foreshadowed on April 1, BIG W sales growth has been strong, with Easter-adjusted comparable sales growth of 7.4 per cent.

“We’re also progressing our key strategic priorities. Our focus is now moving to plans for F20 to deliver for our customers, team members and shareholders.”

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