Coles Group reported a 5.1 per cent increase in sales revenue to $9.1 billion in 3Q24, with comparable sales growth of 4.2 per cent. The Group’s third-quarter sales up 3.4 per cent to just over $10 billion.
The Liquor business fell 1.9 per cent to $786 million, with CEO Leah Weckert saying it reflected consumers cutting back on their discretionary spending. She said 30 per cent of shoppers had reduced their alcohol purchases, having an impact on its 964 liquor stores – Liquorland, Vintage Cellars, and First Choice Liquor Market.
“We’re seeing people trading into low-cost alternatives, so, for example, out of champagne into things like prosecco or Australian sparkling.
“People are moving back into beer because this tends to be a category where there are cheaper alternatives,” Weckert said.
While Liquor sales revenue was down, its eCommerce sales were up 4.1 per cent to $44 million, with 5.7 per cent penetration, 6.4 per cent including Coles Online.
Coles was also moving away from less profitable bulk sales and adjusting its promotional mix across eCommerce channels. Its Exclusive Liquor Brand portfolio added 39 new lines during the quarter.
In February, the company acquired 20 liquor stores in Tasmania from Federal Group, significantly increasing its footprint in the state. The acquisition will see 30 per cent of Tasmanians within a five-minute drive from a Coles Liquor store.
Weckert said the strong performance in Supermarkets stemmed from its summer value campaign, lowering prices on more than 300 products, expanding its Coles Simply range, almost 1000 products placed on every day low prices, and successful changes to its Flybuys loyalty program.
Coles has been rolling out an instant $10 off at check outs for Flybuys members. Weckert said the program had 6.8 per cent growth in active members, with triple digit growth in customer points redemption.
It had successful Australia Day and Valentine’s Day campaigns, as well as the Pokemon Builders collectibles program. An early Easter also helped, as did the fact that this year did not repeat the significant supply chain disruptions experienced in the same period last year.
Meanwhile, eCommerce sales increased by 34.9 per cent to $856 million and penetration growing to 9.3 per cent. Strong sales were seen in both Home Delivery and Click & Collect.
Weckert said a focus on targeted customer offers and strong growth in Coles App monthly active users – up 44.1 per cent – underpinned the sales growth.
Its digital platforms are also increasingly influencing in store purchases. More than 20 per cent of store sales can be linked to customer research on the Coles App or website before buying in store.
Weckert said early signs from Q4 are positive and the continued deflation in fresh produce and meat. The opening of its Kemps Creek automated distribution centre and two CFCs will improve operating efficiency.
