Coles posts $1 billion profit as customers demand value

With inflation and cost-of-living pressures rising, Coles says its Dropped & Locked value campaigns and own brand offerings boosted sales in FY23.

For the 52 weeks to June 25, sales from continuing and discontinued operations reached $41.5 billion – up 5.3 percent – while tax-paid profit rose to $1 billion.

Supermarket sales reached $36.7 billion, up 6.1 percent, with online sales of $2.8 billion, up 1.1 percent as customer shopping behaviour normalized with the return to in-store shopping.

Due to rising cost pressures, the Exclusive to Coles range delivered $12.4 billion in this financial year, up 9.6 percent.

The sales growth was attributed to the retailer’s Dropped & Locked value campaigns and the successful execution of trade plans during Easter, Christmas, and Mother’s Day.

Coles completed 46 store renewals and opened 17 new stores and closed six, taking the network to 846 supermarkets.

Sales in Coles’ liquor division reached $3.6 billion driven by strong performance of the Liquourland banner. Online sales increased 22.6 percent to $203 million driven by on-demand delivery and express delivery through Uber Eats and DoorDash.

The Ready-to-Drink category was the strongest performing segment with its Exclusive Liquor Brand sales increasing by 8.5 per cent for the year.

Coles Group CEO, Leah Weckert, said the business is continuing to “invest, innovate and drive sustainable growth” since its demerger.

“Cost of living is the number one focus for our customers right now and we continue to invest in providing value through ‘Dropped & Locked’, everyday trusted pricing, weekly specials, Flybuys and our exclusive brand portfolio.

“These initiatives are resonating with customers and we remain well positioned to grow in the current environment as more customers choose to eat at home.”

During the year, Michael Courtney was appointed CEO of Coles Liquor while Anna Croft became the chief commercial officer.

Moving forward, the retailer says cost of living pressures “are likely to remain” for many Australian households and the business will continue to invest in its physical and digital footprint.