Coles Group’s third quarter sales revenue increased by 12.9% to $9.2 billion, according to the retailer’s latest results.
Coles CEO Steven Cain has thanked team members, suppliers and community partners, SecondBite and Foodbank, for their “enormous efforts” during the third quarter to sustainably feed all Australians at a time when bushfires and the impact of COVID-19 made that purpose more important than ever.
“We would like to thank the government for establishing the Supermarkets Taskforce,” he says.
“We are also grateful to the State and Federal Health authorities for their expert advice on how to combat the threat of infection in our stores and through our supply chain, and we continue to work with them to implement recommended measures to keep our team members and customers safe, including promoting the use of the government’s COVIDSafe app.
“We have been encouraged to see the way that Australians have met this challenge as a community, taking the opportunity to help neighbours, family and friends wherever they can.
“As we all continue to adjust to the many changes that have resulted from the pandemic, Coles is already taking steps to help restore Australia’s economic recovery. This includes hiring an additional 12,000 team members, continuing our multi-billion dollar capital and operating expenditure plans to underpin future growth, continuing to prioritise value for customers, continuing sporting and community sponsorships, and paying an interim dividend of more than $400 million to our shareholders, which directly and indirectly benefits millions of Australians.”
Supermarkets sales revenue for the third quarter was $8,230 million. This was up 13.8% on the prior corresponding period with comparable sales growth of 13.1%.
According to Coles, strong sales growth in January and February pre COVID-19 was driven by continued successful execution of the retailer’s strategy to deliver trusted value via its campaign to lower the cost of BBQs and school lunchboxes.
Range reviews were also conducted across more than 30 categories including skin care, coffee and snacks, with more new products and tailored ranges.
Coles’ now recyclable Fresh Stikeez collectible campaign returned to encourage more Australian children to eat a healthier diet supported by Curtis Stone, and Stephanie Alexander’s Kitchen Garden Foundation.
During COVID-19, restrictions were placed on a number of categories including toilet rolls, hand sanitiser, pasta, rice and mincemeat. These restrictions, says Coles, are gradually being lifted as demand reduces and supply improves.
Coles Online sales revenue grew by 14% in the third quarter, despite Home Delivery and Click & Collect being temporarily suspended in March prior to the launch of COPS. Growth, says Coles, was supported by the expansion of the network and stronger seasonal volumes across the January holidays. Coles Online is now seeking to increase capacity to meet the demand of customers by recruiting more team members and extending and increasing pick and delivery shifts.
Own Brand had a reported sales growth of 15% in the third quarter. Own Brand continues to grow faster than proprietary brands, says Coles, and achieved sales contribution of 30% at the end of the quarter. Over 260 new products were launched in this range during the quarter.
Coles recorded inflation excluding tobacco and fresh of 1.8% in the third quarter with overall Supermarkets inflation of 2.6% as unprecedented demand and uncertainty of supply led to a lower promotional mix. Inflation was seen across all categories, particularly dairy, deli and meat, says Coles.
Coles completed six supermarket renewals during the quarter. This included five Format C renewals. In addition to the renewals, three supermarkets were opened and one closed with Coles ending the period with 825 supermarkets.
Liquor sales revenue for the third quarter was $740 million. This was up 6.1% on the prior corresponding period with comparable sales growth of 7.2%.
Liquor sales increased as a result of COVID-19 later in the quarter. Prior to the onset of COVID-19, Coles says the liquor market remained subdued as customer drinking habits were impacted by the bushfire smog and subsequent floods.
The renewal program across the First Choice Liquor Market continued with four renewals completed during the quarter.
The Vintage Cellars trial concept store is also operating with “encouraging” early results, particularly in the spirits and wine categories.
During the quarter, refreshed websites were launched across all three banners which delivered online growth of 34%.
Investments were also made in online capacity to support the growing demand for online delivery.
Coles opened two new liquor stores during the quarter and closed six. This brings the total network to 913 retail liquor sites.