Coles has seen its total group sales rise 3.7 per cent to $22.2 billion, while its net profit fell 8.4 per cent to $589 million in its 1H2024 results.
The group reported that its supermarket revenue was up 4.9 per cent and excluding tobacco, its supermarket sales increased 6.2 per cent.
It stated that sales revenue growth was driven by better product availability, the successful execution of seasonal events such as Christmas and Father’s Day as well as a positive response to the recent Curtis Stone BBQ continuity campaign.
Higher interest rates took a toll on the company, with financing costs rising 13.9 per cent from $187 million to $213 million.
In response to the current senate inquiries around price-gouging, Leah Weckert, CEO and Managing Director of Coles Group, said that the group makes around $2.60 profit for every $100 spent by customers.
“That margin has now been stable for at least the last five years, and it has not gone up as we have seen inflation cut through.
“They [profits] allow us to continue to invest in our business and deliver for our stakeholders, whether they are our customers, suppliers, team members, community partners or shareholders.”
Weckert explained that they understand the cost-of-living pressures facing customers, such as higher rent, mortgage, energy, and other household bills.
“That’s why we are working hard to deliver value to our customers every day. Over the last six months, we lowered the prices of hundreds of products through our ‘Great Value, Hands Down’ campaign and we delivered additional value through a wide range of Exclusive to Coles products, weekly specials, and our Flybuys loyalty program. We know that price matters to our customers, especially during the festive season.”
Looking at consumer behaviour, Weckert said that while location and convenience used to be key factors in choosing where to shop, consumers are now more likely to travel to find better value.
“We’ve seen for many years now that convenience of the location of the store was probably one of the key factors for customer, and I think we’ve got a growing cohort of customers now where value is king and they’re willing to actually travel and switch between stores to find value and access to the best prices.”
She explained that nearly 90 per cent of people are making choices and changes to minimise the cost of their groceries.
“We are definitely getting a lot of feedback from customers that they are eating more at home and when they’re doing so, they’re cooking in bulk and freezing meals to help it go further.”
To stay up to date on the latest industry headlines, sign up to the C&I e-newsletter.