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Coles supermarket and convenience sales grow

Wesfarmers announced its first quarter 2015 retail sales results last week with Food & Liquor headline sales up 5.8% during the quarter to $7.3 billion, helped by easing price deflation and ongoing investment in value, but partially offset by tobacco excise increases and fresh produce inflation.

Coles continue its grocery sales growth trend by posting like-for-like (LFL) food and liquor store sales growth of 4.3% for the quarter, while excluding liquor, LFL food store sales jumped to 5.0%, outpacing Woolworths for the 25th consecutive quarter.

Coles managing director John Durkan said that the LFL sales growth achieved during the quarter was pleasing, driven by further value investments resulting in continued improvements in sales density, transactions, basket size and fresh participation.

“Coles understands that Australian families are facing higher costs of living and we have continued to invest in better value, including launching ‘Down Down Frozen’ across more than 100 product lines. We have also provided increasingly targeted offers to customers through flybuys,” Mr Durkan said.

During the quarter, both Murray Goulburn and Norco commenced supplying Coles branded milk under long-term arrangements.

Coles opened four larger supermarkets and closed one smaller supermarket during the quarter, taking total supermarkets to 765. With 22 stores refurbished, total supermarkets in the ‘renewal’ format rose to 444 and 58% of the network.

Liquor transformation activities commenced and opened were 16 new liquor stores with a majority co-located with Coles supermarkets, while nine were closed for a total of 838 liquor stores.

In petrol and convenience, total Coles Express sales, including fuel for the quarter were $1.9 billion, a fall of 2.3% on the previous corresponding period. Headline fuel volumes declined 3.0% during the quarter, while LFL fuel volumes fell 4.6%.

Convenience store sales, excluding fuel sales, grew by 11.1%, while LFL store sales grew 8.3% due to improved ranges, more effective promotions and the effect of tobacco excise increases. Four new Coles Express sites opened and one closed, bringing the total store network to 645 sites.

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