Wesfarmers, the owner of Coles supermarkets, has lifted its first-half net profit by 1.2 per cent to $1.393 billion, with Coles’ convenience division also producing solid sales growth.
Coles’ first-half revenue in its convenience division dropped 8.5 per cent, against store sales growth of 11.6 per cent, indicating lower fuel prices and more discounting in store. Total revenue for convenience was $3.591 billion in the six months to December 31 2015, compared to $3.924 billion in 2014.
Coles supermarkets’ earnings before interest and tax (EBIT) up by 5.6 per cent to $945 million on revenue growth of 3.1 per cent and food and liquor recorded sales growth of 6 per cent to $937 million.
Wesfarmers managing director Richard Goyder said the group’s retail portfolio delivered a strong increase in EBIT of $176 million, or 9.2 per cent, during the half supported by good Christmas seasonal trading in all businesses.
“The good momentum in Coles’ food and liquor business continued during the half,” Mr Goyder said.
Mr Goyder said that despite lower fuel volumes and average fuel price, the convenience business produced a solid result, supported by strong growth in store sales.
Coles opened 20 new “bigger and bolder” Coles Express stores in the first-half period, while it also closed one site. The retailer said Coles Brands sales grew following the rollout of its Coles ‘Every Day’ price promotions throughout its Express networks, and it also achieved record food to go sales growth, largely driven by the roll out of its Expresso-To-Go coffee.
Food to go remains a key growth category for the company, with further initiatives planned for 2016. In its results presentation, Coles said it will also continue to focus on customer demand for greater availability of diesel and premium fuel grades.