While Woolworths was grappling with industrial action and underperforming business units in 1H25, Coles Group was reaping the benefits of its savings and value campaign and internal Simplify and Save program to record $23 billion in sales.
Snapshot
- Group sales: $23b, up 3.7% on prior corresponding period (pcp);
- Supermarket group sales: $20m, up 4.3% pcp;
- Group earnings before interest, taxes, depreciation and Amortisation (EBITDA): $2b, up 10.3% pcp;
- Supermarket group EBITDA: $1.93b, up 11.8% pcp;
- NPAT: $1.11b, up 5% pcp; and
- Dividend: 37 cents per share.
CEO Leo Weckert said, “We have had a strong focus on value, fresh quality and availability which has supported volume-led growth in Supermarkets during the half.
“Pleasingly, we saw improving customer experience metrics during the period, reinforcing the importance of delivering affordability and a great shopping experience whilst customers continue to face cost of living pressures.”
The company’s seasonal ‘Great Value, Hands Down’ value campaign and launching more than 530 Exclusive to Coles products delivered good results, with Coles Finest revenue growing 10 per cent also .
Weckert said the focus was on value and higher-end products to meet consumers cost-saving consciousness and their desire for a treat while going out less. The use of analytics and tech-enabled store-specific ranging also contributed to revenue growth.
“We also made good progress on our Simplify and Save to Invest target, delivering $157 million in cost savings, allowing us to offset continued cost inflation and invest in our customer proposition, whilst delivering returns for the many Australians who are shareholders.”
Its ‘Simplify and Save to Invest’ delivered $157 million and also reduced store theft and waste by 39 basis points.
Sales growth was underpinned by the successful delivery of seasonal events including Christmas, Halloween and Black Friday, trade events including the SMEG and ‘Christmas Instant Win’ campaigns, and a positive customer response to, and continued investment in, our ‘Great Value, Hands Down’ value campaigns.
Customer experience metrics also improved across the half, driven by better availability, consistent fresh quality, and a positive store and checkout experience, Weckert said.
It also made the most of Woolworths’ industrial action in Victoria and New South Wales, investing “significant resources” and working with suppliers to rapidly increase supply of products to impacted stores, and its Victorian CFC.
“We also significantly increased team member resources within stores. Pleasingly, during this period both our Queensland and New South Wales ADCs demonstrated their ability to ramp up quickly to support our Victorian DCs to maintain availability in store and online. These actions enabled the supermarkets network to generate approximately $120 million in incremental sales,” Weckert said.
Value was a consistent focus for Coles, building on seasonal value campaigns like Spring and Christmas, with more than 4200 products on everyday low prices. Its Exclusive to Coles portfolio grew sales revenue by 5.1 per cent compared to pcp (12.7 per cent on a two-year stack basis) and launched more than 530 new products.
“We saw strong volume growth across the portfolio, particularly over the Christmas period, with Coles Finest being our strongest performing tier with sales revenue growth of 10.2 per cent as customers entertained more at home,” she said.
