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Higher shelf prices underpin 3.6pc Coles first quarter sales increase

Carrie LaFrenz
Carrie LaFrenzSenior reporter

Coles says its 3.6 per cent rise in first quarter sales to $10.25 billion has been underpinned by its supermarket business, with customers eating at home and looking for special offers amid pressure on household budgets.

Supermarkets revenue gained 4.7 per cent to $9.2 billion for the 13 weeks to September 24. Excluding tobacco sales – which continued to decline in line with industry trends – sales increased by 5.9 per cent.

Comparable sales grew by 4.6 per cent in the first quarter, the company said, a marked slowdown from 6.8 per cent the fourth quarter of 2023.

Rival Woolworths on Wednesday reported comparative sales growth of 5.5 per cent from 6.4 per cent in the June quarter of 2023.

Coles Group CEO Leah Weckert says shoppers are seeking out value. Louie Douvis

Coles said prices increased 3.1 per cent in the three months to the end of September, compared with a 5.8 per cent increase in the last quarter of the previous financial year. The lower inflation was due to falling prices in meat, seafood and for baked goods.


Fresh produce price increases also continued to moderate. But inflation remains elevated at 5.7 per cent primarily driven by farmgate milk prices and higher commodity prices, including cheese, eggs and oil, Coles said.

The nation’s second-largest grocer reported a 9.4 per cent increase in revenues from its own-brand products, the fourth consecutive quarter of growth, with sales reaching $3.2 billion. Customers also continued to shift to healthier options with Coles Own Brand health and lifestyle product sales growing by almost 30 per cent.

Coles Liquor revenue increased by 1.8 per cent to $851 million in the quarter, helped by new store openings and online sales – which rose 32.2 per cent.

Coles chief executive Leah Weckert said shoppers were trading to cheaper beer. In wine, there was growth in sparkling, prosecco and rose was offset by lower champagne sales. The Ready-to-Drink category also grew strongly.

She said the company had also introduced new measures to reduce supermarket theft, waste and markdowns. Coles in August flagged growing theft as a significant problem at the chain.

Coles said on Thursday there were improvements in waste and markdowns across the quarter, and new technology to help stem theft in stores is expected to operate in over 250 of the most impacted sites this year.


But theft remains a major headwind this half.

“The early results of stores where the technology has been rolled out are in-line with our expectations. A number of broader cost and margin optimisation measures have been initiated across the Group with some benefits expected in the first half,” the company said.

But JPMorgan analyst Bryan Raymond said in a note before the sales results that it was too early for capital investment in cameras and gates to be making an impact on stock loss.

“We would not expect a meaningful underlying shift in shoplifting trends in recent months given cost of living pressures are persisting,” he wrote.

MST Marquee analyst Craig Woolford said in a note comparable sales growth in Coles supermarkets slowed more markedly than Woolworths and its liquor business had a weak quarter.

“We expect small downgrades to earnings given the weaker trends are likely to continue into 2Q24e and beyond as industry-wide inflation eases back,” he said.

More to come

Carrie LaFrenz is a senior journalist covering retail/consumer goods. She previously covered healthcare/biotech. Carrie has won multiple awards for her journalism including financial journalist of the year from The National Press Club. Connect with Carrie on Twitter. Email Carrie at

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