2 weeks Ago By Kayla Olaya
Supermarket giant Coles has revealed its customers are increasingly shopping around to make their dollars stretch, going to up to seven or eight retailers in a week to find lower prices and stay within their budgets. Speaking after the release of the company’s quarterly results, Coles chief executive Leah Weckert said that customers were focused on specials and were increasingly turning to home branded products as they grapple with Australia’s cost-of-living crisis. Coles chief executive Leah Weckert says shoppers are increasingly buying home brand products.
Credit: Dominic Lorrimer This is despite Coles reporting price deflation in major categories such as meat, dairy, health and beauty, and home care categories. “Cross-shopping is really, a really significant feature of the market at the moment. Customers are definitely looking for specials right now,” Weckert said.
“We’ve seen quite a substantial step-up in the last 12 months in the number of retailers that customers are using to fulfil their baskets each week on food. We’re very focused on making sure that our value proposition every week really resonates with customers, and we’re doing that through the weekly specials that we run.” Loading Coles reported a 2.
9 per cent jump in sales to the end of September. The supermarket division was the best performer, while liquor sales stalled. The supermarket division made $9.
5 billion in sales, growing by 3.5 per cent in-store and climbing to 22.4 per cent growth through online sales.
Liquor, on the other hand, experienced no growth in-store and online sales dipped 1.9 per cent. Customers are pivoting away from buying alcohol as it trickles into the category of discretionary spending and customers see this as an area of spending they can forego to balance out their budgets, Weckert said.
Coles and Woolworths have both reported strong growth in online grocery in their September quarter updates this week, while also pointing out customers were trading down to home brands. “We continue to invest in our own brand portfolio, which offers an affordable option for the customers in most categories. That has included an expanding range that we have in both the ‘simply’, which is our entry tier range, but also in our finer range,” Weckert said.
Coles reported a 2.9 per cent jump in sales to the end of September. Credit: Louie Douvis Coles did not disclose its profit margins, unlike Woolworths which saw its share price tank on Wednesday after a profit d owngrade.
Weckert said Coles had a “number of headwinds coming through the business in the form of cost increases and cost inflation on our operational lines”. Loading Jefferies analysts Michael Simotas and Naveed Fazal Bawa noted that Coles might be “modestly out-trading” Woolworths as it didn’t mention margin pressure in its results, but that, on the downside, sales at Coles were still slightly weaker than expected. Coles also unveiled a new $880 million distribution centre set to open in Victoria, that will aid in the flow of its supply chain and product availability by contributing an additional 15 per cent more capacity to current storage facilities.
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License this article Supermarkets Coles Supermarkets Leah Weckert Cost of living Shopping Kayla Olaya is a reporter at The Sydney Morning Herald. Connect via email . Most Viewed in Business Loading.
