The third quarter sales results of Wesfarmers Limited (Wesfarmers) showed its subsidiary Coles put in a strong sales performance for the three months to 31 march 2013.

Coles’ headline food and liquor sales for the third quarter were $6.5 billion, up 6.6 per cent on the previous corresponding period. Food and liquor sales were up 5.5 per cent to $20.8 billion for the financial year to date.

Comparable food and liquor store sales increased 5.3 per cent in the third quarter and 4.3 per cent for the year to date.

Coles said good comparative sales growth was driven by strong volume growth. The supermarket group’s recorded overall food and liquor price deflation of 1.3 per cent in the third quarter, with price deflation of 1.7 per cent recorded for the financial year to date.

“Our customers have benefited from our focus on quality fresh food and a better shopping experience, as well as our unwavering commitment to lowering prices despite external cost pressures,” said Ian McLeod, Coles Managing Director.

“The reinvigoration and extension of our ‘Down Down’ campaign during the quarter began in January with the lowering of prices on hundreds of grocery lines that our customers buy most,” Mr McLeod said. “The vast majority of these lower prices have been funded by Coles, and this investment has been welcomed by our customers and has resulted in good grocery volume growth,” he said.

Coles said customers had also responded positively to the re-launched ‘FlyBuys’ program and targeted offers.

“Our commitment to locally grown and sourced produce continues to be well received by our customers with fruit and vegetable sales experiencing double digit comparative growth in the period,” Mr McLeod said. “Coles’ growth in locally grown produce is driven by collaboration with Australian farmers, benefiting suppliers with greater volumes and security of sale, and customers through continued improvement in product quality and value,” he said.

Coles opened four new supermarkets and closed three supermarkets during the quarter, taking the total number of supermarkets to 754. Coles also completed a further eight refurbishments, bringing the total number of supermarkets in the renewal format to 313.

Liquor

Coles said liquor continued to be a drag on overall food and liquor sales, although progress had been made.

Coles opened six new liquor stores and closed seven liquor stores during the third quarter, taking the total number of liquor stores to 802.

Convenience

Meanwhile, Coles Express sales increased 6 per cent on the previous corresponding period, up to $1.9 billion. Total sales for the financial year to date increased 4.6 per cent to $5.9 billion.

Comparative fuel volume increased 3.1 per cent in the third quarter and increased 2.3 per cent in year to date. Convenience store sales, excluding fuel sales, increased 2.5 per cent for the third quarter and 0.9 per cent in the year to date. Comparable store sales increased 0.5 per cent in the third quarter and decreased 1.4 per cent in the year to date.

Coles said the Coles Express result demonstrated continued customer demand for quality fuel at competitive prices, improvements in the convenience store offer and the continued growth in supermarket numbers.

“The customer response to the extension in the quarter of the ‘Down Down’ campaign to milk and bread in Coles Express stores was particularly pleasing,” Mr McLeod said. “This further reinforced our understanding that Australian consumers are looking for great value across all channels and products,” he said.

Coles Express opened one new site during the third quarter, bringing the total store network to 635 sites.

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