Continued sales growth and changing consumer habits are shifting supermarket giant Coles’ focus, as it looks to navigate a challenging economic climate.

In its fiscal third quarter, sales of $9.8 billion across the group represented a 4 per cent increase year-on-year. Excluding tobacco, Coles recorded a 5.7 per cent increase.

The supermarket giant said it witnessed an increasing demand for “pantry staples” from its consumers, citing the ongoing conflict in the Middle East and its impacts as a potential cause.

“We delivered another strong sales result reflecting the strength of our customer offer and disciplined execution against our strategic priorities,” Coles Group CEO, Leah Weckert, added. 

“Achieving consistent sales momentum for the period over multiple years demonstrates our commitment to remaining focused on long-term outcomes whilst successfully navigating short-term volatility in market conditions and supply chains.” 

Coles said that it is starting to see an increase in supplier cost price increase requests and higher costs for its own operations. “We are actively managing these and will mitigate impacts where possible, while balancing the needs of customers and suppliers,” the company added.

The ASX filing added that ‘Exclusive to Coles’ sales increased by 7.3 per cent, following the introduction of 142 new products into the portfolio. The ‘Coles Finest’ range was the strongest performing category of this portfolio, with revenue increasing by 8.2 per cent. E-commerce sales revenue increased by 24.8 per cent, Coles added.

“We know value and availability will be important to our customers over the months ahead, and we are well placed to respond to this with our extensive own brand portfolio, our leading E-commerce platforms, and the strength of the infrastructure and capability that sits within our supply chain,” Weckert said.