Coles has reported another solid year of growth with increased revenue in its liquor, supermarket and Express business bringing group sales revenue to $38.6bn, up 3.1 per cent on the prior year and 10.2 per cent on a two-year basis.

The three business groups experienced sales growth despite cycling elevated sales in the prior corresponding period due to the onset of COVID-19 and the subsequent national lockdown. Coles said that growth was driven by “strategic initiatives that resonated with customers” and customers spending more time living and working at home during COVID-19.

Group EBITDA increased by 5.4 per cent to $3.4bn and Group EBIT increased by 6.3 per cent to $1.9bn.

James Graham, Chairman of Coles Group, said: “The result highlights the commitment of the Group to grow trust and shareholder value in a year marked by extraordinary community and business challenges. Pleasingly, significant progress has been made in the development of new operating systems and the investment in new technology platforms which will further strengthen our long-term performance.”

In Coles Express, sales revenue was $1.2bn for the year, an increase of 7.7 per cent on the prior corresponding period, with comparable c-store sales growth of 6.8 per cent, and 11.4 per cent on a two-year basis.

For the fourth quarter, c-store sales revenue increased by 2.2 per cent and comparable c-store sales growth was 1.2 per cent relative to the prior corresponding period. On a two-year basis, Express headline sales growth increased to 10.8 per cent in the fourth quarter compared to 13.2 per cent achieved in the third quarter, while two-year comparable sales growth in the fourth quarter increased to 9.4 per cent compared to 10.6 per cent achieved in the third quarter.

Coles said: “Sales growth was largely driven by food-to-go (including coffee) and cold drinks, supported by recent investments in new self-serve coffee machines and fast-lane fridges, as well as benefits from the range review implemented in the drinks category in the prior year.

“Forecourt and tobacco sales also contributed to growth for the year, although exited the year in decline whilst cycling elevated sales associated with COVID-19 as the business benefited from lower CBD footfall and the closure of tobacconists in the prior corresponding period.”

“Strategic investments were made in the Express network, including renewing over 80 sites together with our Alliance partner.”

During the year, 13 new Express sites were opened and nine closed, taking the total network to 717 sites.

Fuel volumes declined by four per cent during the year with comparable fuel volumes declining by 5.4 per cent driven by COVID-19 restrictions impacting traffic flows. Average weekly fuel volumes of 57.1mL per week were recorded during the year. For the fourth quarter, average weekly fuel volumes were 59.0mL per week, broadly flat quarter-on-quarter with volume growth late in the quarter impacted by lockdowns.

Strong c-store sales and cost control supported an increase in Express EBIT to $67 million.

Steven Cain, CEO of Coles Group, said: “In another year of COVID-19, floods and bushfires, I would like to thank our team members, suppliers and community partners for their resilience and support to ensure the security of food supply and a safe environment for our customers.

“Whilst the COVID-19 Delta variant is presenting some new challenges, I would like to thank all levels of government for continuing to work with us to help keep our customers, team members and the community safe, including by providing priority access to vaccines in some critical areas.

“In February, we said the short-term outlook would be dependent upon the efficacy and pace of the vaccination program. Six months on, government forecasts are pointing to a more normal outlook from early in calendar 2022 including the longer-term prospect of increased migration.

“From a strategic perspective we have delivered a second year of far-reaching change, to begin creating a differentiated omnichannel Coles with more unique products, increased use of data, a leading e-commerce offer and investment in technology capability throughout the business.

“We have also progressed the roll out of successful new formats with Coles Local and Liquorland and launched our new Together to Zero and Better Together sustainability strategy – all built around longer-term relationships with our supply partners.

“As we approach the halfway point of our transformation program, with strong foundations in place, and increasing investment in the business, I expect the pace of change at Coles to continue to accelerate to meet the changing demands of our customers and opportunities in the marketplace.”

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