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Coles’ growth stifled by shift in shopping behaviour

E-commerce sales predictably rose during the quarter.

Coles has suffered under the same quarterly conditions as rival Woolworths, with shopping and movement restrictions causing sales in its supermarkets to grow a slight 1.8 per cent and sales in its Express business to fall 10.1 per cent.

Overall, total sales rose 1.5 per cent compared to the first quarter of FY21, with the return to lockdown caused by the Delta variant of Covid-19 causing some significant disruptions in the business’ supply chain, stores and to its customers.

According to Coles’ chief executive Steven Cain, however, the problems caused by the Covid-19 variant are beginning to ease as vaccination rates improve across the country.

“The Coles team… have done an extraordinary job in this 18-month battle with Covid-19 to ensure continuity of supply as an essential service,” Cain said.

“We are now looking forward to providing a safe and happy Christmas and summer season, serving Australians with more sustainable, great value and easy entertaining inspiration – for what we expect will be a record number of smaller gatherings for families and friends.”

Despite slight growth in the business’ supermarkets, and depressed performance of its Express brand – caused largely by the lack of road usage throughout lockdowns impacting convenience stores – the business’ online platform saw massive 48 per cent sales growth however, with more customers forced or choosing to shop online throughout the 13 week period.

Online liquor sales saw particularly strong growth of 72 per cent.

Costs associated with Covid-19 also rose, however, to approximately $75 million: largely due to the amount of team members which needed to self-isolate throughout the quarter, additional door greeters to facilitate QR code compliance, and lower productivity across its supply chain.

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