Coles has reported its third quarter results with total group sales revenue of $9.7bn, up 6.5 per cent on last year’s third quarter and supermarket sales revenue increasing by seven per cent to $8.6bn.
Gross retail sales increased by 7.9 per cent to $8.9bn and comparable sales grew by 6.5 per cent on the prior corresponding period.
Sales growth was supported by the expansion of the ‘DROPPED & LOCKED’ value campaign and the commencement of the latest MasterChef Cookware continuity program, which continues until July.
A new range of Flybuys member pricing, providing more value to Flybuys customers, was also launched with member numbers and point redemptions increasing during the quarter.
A moderation in consumer hospitality spending and increasing immigration also supported sales growth, which was partially offset by a continued industry decline in tobacco sales. Excluding tobacco, sales revenue increased by 8.2 per cent.
E-commerce grew revenues by 2.7 per cent to $662m resulting in 7.5 per cent contribution to Supermarket sales. Revenue growth was partly driven by Click & Collect Rapid (order to collect in 60 minutes), now available in around 400 stores, scaling Rapid Delivery (less than 90-minute order to home delivery) to more than 460 stores nationwide as well as improvements in the end-to-end customer experience.
Exclusive to Coles delivered $2.9bn of sales, an increase of 11.4 per cent on the prior corresponding period, with 227 Coles Own Brand products launched during the quarter.
During the quarter, Coles opened one new store and closed two stores, taking the total network to 841 supermarkets.
Coles Express sales revenue of $271m increased by 0.7 per cent while comparable sales grew 0.9 per cent on the prior corresponding period.
Excluding tobacco, sales increased by 10.6 per cent with the food-to-go category continuing to be the key driver of growth with ongoing momentum in sandwiches, wraps, and coffee.
Fuel volumes improved in the quarter with average weekly volumes of 58.3mL per week, up 4.3 per cent on the prior corresponding period.
One site was opened, and one site closed during the quarter, taking the total network to 706 sites.
The sale of the Coles Express business to Viva Energy has just completed. Conditions of the sale include that Coles customers will continue to access the four cent per litre fuel docket across the network, and Viva Energy will remain a partner of the Flybuys program, with customers able to continue earning and redeeming points across the network.
Coles will also continue to partner with Viva Energy in relation to product supply arrangements, enabling customers to benefit from continued access to Coles Own Brand product range.
Coles Group CEO, Steven Cain said: “At a time when cost of living pressures are mounting for many customers, the unique combination of Australia’s largest own brand range, hundreds of dropped and locked prices, thousands of weekly specials, free Masterchef cookware and Flybuys points has successfully driven sales and volume. Pleasingly we saw some modest improvement in supply chain availability however there is still more to do.
“As I hand over the reins of this iconic, and now ‘essential’ 109-year-old company to Leah Weckert on Monday, I am proud of what has been achieved for all our stakeholders over the last five years since demerger. Customers rate Coles as one of Australia’s most trusted brands, and our millions of direct and indirect shareholders have benefited from upper quartile returns.
“For our team and community, Coles is a more diverse and inclusive organisation, with sustainability credentials that have been recognised globally. The technology capability of Coles and our partners will continue to accelerate, with our first automated DC, the biggest single capital investment in Coles’ history, a real milestone.
“I would like to thank everyone at Coles Group, including Coles Express, and our various partners, for their support and wish them continued success. I know that the best is yet to come.”