Coles sticks to pricing strategy, but slow progress on Coles Express and Liquor

Posted by Andrea Hogan on 1st May 2017

John Durkan, Coles Managing Director

Coles supermarket has signalled it will continue to invest in its ‘everyday low pricing’ strategy to win over customers.

In reporting the financial results for the third quarter of its 2017 financial year, Coles Managing Director, John Durkan, said the supermarket needs to “continue to proactively invest in the customer” to maintain its market position.

“This was evident throughout the quarter, whether that was through the addition of family essentials like our 3-star mince and Coles brand cheeses to Every Day value, or by offering our award winning hot cross buns to customers at an incredible price,” Durkan said.

“This enduring customer focus will ensure Coles is positioned well for the long term,” he said.

In the third quarter of its 2017 financial year, sales in food and liquor for Coles parent group, Wesfarmers, were AUD $7.6 billion, up 1.2 per cent on the prior corresponding period in 2016.

Food and liquor sales for Wesfarmers’ 2017 financial year to date have increased 1.9 per cent to AUD $24.6 billion.

Liquor ‘in line with expections’

Durkan said Wesfarmers liquor business continues to execute its turnaround strategy in line with expectations.

“Liquor continues to see growth in both headline sales and transactions, but there still remains much opportunity for improvement as we progress our customer-led strategy,” he said.

Wesfarmer-owned liquor businesses include First Choice, Liquorland and Vintage Cellars.

Australian Food News has previously reported that competitor Woolworths has been winning a growing proportion of Australia’s alcohol retail dollar with Roy Morgan Research reporting in March 2017 that Woolworths was responsible for nearly 50 per cent of all sales.

Convenience not so convenient for profits

Total Coles Express sales for the quarter were AUD $1.4 billion, a decrease of 3 per cent on the prior corresponding period.

Wesfarmers said “in addition to challenging market growth and the continuing impacts form competitor site openings, volumes remained in decline as Coles Express continued to respond to changes in the commercial terms of the Alliance which included an increase in Coles’ wholesale fuel price during the quarter.”


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