Saturday, June 22, 2024

Coles releases 2023 third quarter results

Coles has released its 2023 third quarter results, with Group sales revenue increasing by 6.5% to $9.67 billion.

Commenting on the results, Coles CEO Steven Cain, who hands the reins over to Leah Weckert on Monday (1 May), says: “At a time when cost of living pressures are mounting for many customers, the unique combination of Australia’s largest own brand range, hundreds of dropped and locked prices, thousands of weekly specials, free Masterchef cookware and Flybuys points has successfully driven sales and volume.

“Pleasingly, we saw some modest improvement in supply chain availability, however there is still more to do.

“Customers rate Coles as one of Australia’s most trusted brands, and our millions of direct and indirect shareholders have benefited from upper quartile returns.

“For our team and community, Coles is a more diverse and inclusive organisation, with sustainability credentials that have been recognised globally.

“The technology capability of Coles and our partners will continue to accelerate, with our first automated DC, the biggest single capital investment in Coles’ history, a real milestone.

“I would like to thank everyone at Coles Group, including Coles Express, and our various partners, for their support and wish them continued success. I know that the best is yet to come.”

Supermarkets

Supermarkets sales revenue was $8.6 billion for the third quarter. This was an increase of 7% on the prior corresponding period, period as the business cycled the impacts of Covid-19 (Omicron), floods in NSW and Queensland, and flooding in South Australia which led to logistics disruptions in Western Australia and the Northern Territory.

Gross retail sales of $8.9 billion increased by 7.9% and comparable sales grew by 6.5% on the prior corresponding period.

According to Coles, sales growth was supported by the expansion of the Dropped&Locked value campaign and the commencement of the latest MasterChef Cookware continuity program which continues until July.

A new range of Flybuys member pricing, providing more value to Flybuys customers, was also launched with member numbers and point redemptions increasing during the quarter.

A moderation in consumer hospitality spending and increasing immigration also supported sales growth which was partially offset by a continued industry decline in tobacco sales, adds Coles.

Volumes were “modestly positive” for the quarter, says the retailer, with some improvements in availability. Coles’ delivered in full (DIF) and delivered in full on time (DIFOT) availability metrics improved “slightly” compared to the first half of FY23. They, however, remain below pre-Covid levels at 89% and 81% respectively.

Exclusive to Coles delivered $2.9 billion of sales, an increase of 11.4% on the prior corresponding period, with 227 Coles Own Brand products launched during the quarter.

E-commerce grew revenues by 2.7% to $662 million resulting in 7.5% contribution to supermarket sales. Revenue growth, says Coles, was “partly driven” by Click & Collect Rapid now available in almost 400 stores, scaling Rapid Delivery to more than 460 stores nationwide as well as improvements in the end-to-end customer experience.

Total supermarkets price inflation of 6.2% moderated in the third quarter, compared to 7.7% in the second quarter with packaged inflation of 7.2% (7.9% in the second quarter) and fresh inflation of 4.1% (7.1% in the second quarter).

During the quarter, Coles opened one new store and closed two stores, taking the total network to 841 supermarkets.

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