As expected the Little Shop toy giveaway boosted Coles Supermarkets in the first quarter in what will be its last update owned by Wesfarmers.
Coles said its supermarket sales grew 5% in the first quarter, with better returns from its flybuys loyalty program adding to the Little Shop boost.
Sales came in at $9.84 billion for the three months to September 30, compared with $9.37 billion in the prior corresponding quarter.
Wesfarmers managing director Rob Scott said the results reflected continued good momentum in Coles, driven by the Little Shop promotion, improved in-store execution and investments in flybuys promotions.
“Coles Supermarkets’ headline sales increased 5.8 percent during the quarter, and its total sales increased by 5.0 percent,” Mr. Scott said in Monday’s update that was issued before the market opened.
“Strong growth in basket size, transaction numbers, and units sold, as well as improvements in fresh market share supported the sales result. Coles’ liquor and convenience segments also recorded headline sales growth for the quarter.
Coles’ same-store food growth of 5.1% was expected by many analysts thanks mainly to the Little Shop mania by many youngsters (who nagged parents into chasing the toys at Coles outlets. That was a significant improvement on the 0.3% rise in same-store sales in the first quarter of 2017-18 and the 1.8% growth in the 4th quarter ending June this year.
Same-store liquor sales growth slowed to 1.3% for the quarter, down from the fourth-quarter growth of 2%, and slightly down on the 1.6% growth for the first quarter of 2017-18. Liquor sales, including hotels, for the first quarter, rose 2.1% $744 million, on the prior corresponding period.
Coles’ comparable convenience store sales continued to slide, posting a 14.8% drop for the quarter because of the sharp rise in fuel (and oil) prices in the quarter saw a fall in visits by customers and pricing problems.
Coles Express recorded sales, including fuel, for the quarter of $1.437 billion, up 2.5% on the prior corresponding period.
“Headline convenience store sales grew by 2.4 percent for the quarter and 3.4 percent on a comparable store basis. Growth in convenience store sales continued to be driven by improvements to the overall food- to-go offering and convenience range,“ the statement said yesterday.
“For the quarter, headline fuel volumes decreased 14.8 percent and comparable fuel volumes decreased 15.9 percent. Fuel volumes in the quarter were impacted by a substantial increase in the cost price of fuel caused by higher global oil prices, a lower Australian dollar, and the ongoing impact of changes to the commercial terms of the Alliance. The business continues to work with its Alliance partner to provide a more competitive fuel offer.”
