Coles Group has announced its third-quarter results, which reveal its liquor sales revenue declined by 1.9% to $786 million as
customers reduced their discretionary spending.

Sales fell 3.1% on a comparable basis, compared with analyst predictions of a 0.5% fall.

Coles Group CEO Leah Weckert said the decline was in response to economic pressures and the business continuing to transition away from less profitable bulk sales and adjust its promotional mix across eCommerce channels.

Weckert (above) said 30% of shoppers were cutting back in purchases across its Liquorland, First Choice Liquor Market and Vintage Cellars shops. Early fourth quarter sales have also been broadly in line with the March quarter.

“We’re seeing people trading into low-cost alternatives, so, for example, out of champagne into things like prosecco or Australian sparkling,” she said.

After a long period of falling sales, Werkert said there has been a shift back into beer.

“People are moving back into beer because this tends to be a category where there are cheaper alternatives,” she said.

International spirits brands have been hard hit as shoppers turn to cheaper RTD options.

“The flow on effect from that is what we are seeing is that RTDs are now continuing to grow because customers are trading out of those full bottle of spirits into more affordable options, like RTDs,” she said.

eCommerce sales revenue grew by 4.1% with penetration of 5.7% (6.4% including Coles Online) underpinned by strong
growth in the on-demand channel.

Coles said its Exclusive Liquor Brand portfolio had provided affordable choices to customers during the period, with 39 new lines added during the quarter and more than 80 awards received, including a Gold award and being named Country Winner at the World Vodka Awards 2024 for Pure Origin Tasmanian Vodka.

Across the Liquorland, Vintage Cellars and First Choice banners 17 store renewals were completed, three new stores were
opened and three stores closed. At the end of the period the portfolio comprised 964 stores.

In February Coles successfully executed an agreement to acquire 20 liquor stores in Tasmania from Federal Group. With
only three stores currently in Tasmania, this acquisition will significantly increase Coles Liquor’s footprint in the region.
Following the acquisition approximately 30% of the Tasmanian population will be within a five-minute drive of a Coles
Liquor store. ACCC approval for the acquisition was received in February.

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