Coles has overcome supply-chain challenges and inflationary pressures to record a 17.1 per cent lift in tax-paid profit in its first half.
For the 27 weeks to January 1, sales from continuing and discontinued operations reached $21.4 billion – up 4 per cent – while tax-paid profit rose to $643 million.
Supermarket sales reached $18.85 billion, up 4.6 per cent, which the company says was supported by the retailer’s ‘Locked’ and ‘Dropped & Locked’ value campaigns.
With consumer shopping behaviour beginning to normalise post-Covid during the half, online sales dipped 6.6 per cent to $1.4 billion.
Severe flooding and cool weather conditions resulted in availability challenges during the half across fresh and frozen produce categories.
Supermarket inflation peaked at 7.7 per cent in the second quarter, increasing from 7.1 per cent in the first quarter.
Sales in Coles’ liquor division fell 2.4 per cent to $1.95 billion as the business cycled 15 weeks of Covid-related on-premise closures and restrictions in the previous corresponding period across NSW, Victoria and the ACT. Store closures from flooding in the eastern seaboard, a wet and cool spring and the start of the summer affected sales in the first half. Online liquor sales grew 13.7 per cent.
Liquorland continues to be the strongest-performing banner while express delivery was expanded to 560 stores.
The fuel and convenience business – which has been sold to Viva Energy – earned $607 million, up 5 per cent, driven by growth in the food-to-go category, particularly of coffee and fast food.
“We are well positioned to navigate the current macro environment and as we look to the future, we expect improving availability, population growth and moderation in out-of-home dining, which has been elevated post-Covid to positively impact the business and provide further opportunities for growth,” Coles said in a statement.
The business expects inflation to moderate in the second half and farm-related availability to improve.
Meanwhile, Leah Weckert has been named Coles’ new MD and CEO as outgoing CEO Steven Cain, announced his retirement. He will step down in May.
Weckert has been a senior member of the executive leadership team since the demerger of Coles from Wesfarmers in 2018. She has also held several leading positions within the group including chief executive of commercial and express, CFO, people and culture director and state GM of Victorian supermarkets.
Cain said: “I would like to thank the Coles board, team and our many partners for their support, insights and resilience – particularly during Covid, bushfires and floods. I would like to congratulate Leah on becoming my successor and I wish Coles continued success, and know that the best is yet to come.”
