Saturday, April 13, 2024

Coles releases latest results amid droughts and bushfires

Coles Group’s sales revenue (excluding fuel sales and hotels) for the first half of FY20 increased by 3.3% to $18.8 billion, according to the retailer’s latest results.

During the half, Coles says the ongoing drought and bushfires had a “significant” impact not only on its business but also on many of its suppliers, team members and the communities it serves.

To date, Coles claims it has collected and contributed more than $6 million for bushfire relief. This includes $3 million in gift cards to support 6,000 rural fire brigades across the country, over $3 million in donations to the Red Cross, as well as more than 170 pallets of food, water and essentials for distribution to communities and emergency services both directly and via Foodbank.

“Australians always come together in times of adversity,” says Coles CEO Steven Cain.

“This included many Coles team members who have been able to help support the emergency services, communities and suppliers, and navigate the disruption caused by the devastating drought and bushfire emergencies to ensure that we maintain food supply.

“I am pleased, in the release of our first half results, that we have delivered our demerger dividend commitments and are making clear, early progress on our strategy execution, particularly in supermarkets.”

Supermarkets

Supermarkets sales revenue was $16.6 billion for the half. This was an increase of 3.3% on the prior corresponding period, with comparable sales growth of 2%.

For the second quarter, supermarkets sales revenue increased by 4.8% and comparable sales growth was 3.6%. Comparable sales growth, according to Coles, was driven by both increased basket size and transaction growth.

Coles is now coming to the end of the first year of its new ‘Winning in our Second Century’ strategy with progress on trusted value, new health and convenience ranges, and tailored store formats. As a result, Coles says its supermarkets successfully cycled Little Shop in Q1 and delivered a strong Christmas performance in Q2.

Coles’ tailored store format strategy aims to meet customers’ diverse and changing needs. This has continued during the half with two Format A and 13 Format C stores refurbished. The second Coles local store also opened in St Kilda, Victoria and is said to be delivering sales significantly above the pre-refurbishment levels. Coles now has three Format A and 15 Format C supermarkets across the store network.

During the half, 32 renewals (including the refurbished stores noted above), five openings and three closures were completed. At the end of the period there were 823 supermarkets.

Liquor

Liquor sales revenue was $1.7 billion for the half. This was an increase of 3.3% the prior corresponding period, with comparable sales growth of 1.5%.

For the second quarter, liquor sales revenue increased by 3.1% and comparable sales growth was 2.1%.

Customers responded to clearance activity to support the implementation of tailored range change, says Coles. The refreshed First Choice Liquor Market conversions, according to the retailer, also contributed to sales growth and continue to perform strongly ahead of the rest of the fleet, with conversions rolled out to 47% of the First Choice network.

In December 2019, the Vintage Cellars trial store concept was also launched in Ashburton, Victoria.

Investment in the liquor store network continued with 13 new stores opened and six stores closed, resulting in a total of 917 Liquor sites at the end of the half.

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