E-commerce booms but Coles Express sales suffer during challenging quarter

Coles has reported strong growth of e-commerce sales across supermarkets and liquor for the first quarter of 2022, but c-store revenue has been impacted by lockdowns.

As a result of the lockdowns across NSW, ACT, and Victoria, Coles increased supermarkets e-commerce sales by 48 per cent with sales penetration of nine per cent, while investing in capacity and customer experience, including more than doubling capacity in NSW.

Liquor e-commerce sales grew by 72 per cent and sales penetration of 4.5 per cent with progress made on improved efficiencies through the three e-commerce dark stores.

In Coles Express, reduced levels of traffic on the road as a result of COVID-19 lockdown restrictions led to a decrease in convenience sales revenue of 10.1 per cent (relative to an increase of 2.2 per cent in the fourth quarter of FY21) with two-year headline sales declining by 0.8 per cent.

Coles incurred COVID-19 costs of around $75 million (inclusive of team member discounts) in the first quarter with costs accelerating in August and September, largely due to the approximately 20,000 team members required to isolate in NSW and Victoria, additional door greeters to ensure QR code compliance in store, and lower productivity due to shift bubbles in distribution centres.

A statement from Coles said: “The Delta variant of COVID-19 caused significant disruptions in the first quarter across Coles’ stores, supply chain and to the customers and communities that we serve.

“From the thousands of team members who had to isolate across our store network and distribution centres, to supporting suppliers whose operations were also impacted by COVID-19, our focus has been on keeping our customers and team members safe while maintaining a secure food supply chain.

“Coles has worked collaboratively with state health authorities, governments and industry to refine health protocols for the supermarket sector around team member isolation requirements while also encouraging team members to get vaccinated with strong take-up to date.”

During the quarter, Coles raised more than $1 million for its community partners across Australia including the Robert Connor Dawes Foundation in Victoria and the Stephanie Alexander Kitchen Garden Foundation in Tasmania.

Through Coles Express, $630,000 was raised for Redkite Week to support families facing childhood cancer and more than $1.7 million through the SecondBite Winter Appeal to provide meals for vulnerable Australians.

Steven Cain, CEO, Coles Group, thanked the Coles team for their hard work in getting through a challenging quarter.

“As we embarked on our third year of strategy execution, the COVID-19 Delta strain presented significant challenges in the quarter, which are now beginning to ease as vaccination rates increase. I would like to thank the Coles team, our suppliers and community partners who have done an extraordinary job in this 18-month battle with COVID-19 to ensure continuity of supply as an essential service.

“We are now looking forward to providing a safe and happy Christmas and summer season, serving Australians with more sustainable, great value and easy entertaining inspiration – for what we expect will be a record number of smaller gatherings for families and friends.”

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