Coles has revealed its liquor sales increased by 2.6% in the first quarter of 2022, as growth slows following initial changes in consumer behaviour due to COVID-19. However, the retailer said it had seen strong online sales growth of 72%, supported by recent capacity investments and customer experience enhancements.
CEO Steve Cain (above) is also expecting “the best Christmas ever” due to pent up consumer demand, as lockdowns ease and borders open. He believes customers are preparing to spend up big for the holiday season.
Liquor sales revenue was $874 million for the first quarter, with comparable sales growing by 1.4% despite cycling elevated COVID-19 driven liquor sales in the prior corresponding period when comparable sales were 17.8%. On a two-year basis, Liquor headline sales growth increased to 20.4% in the first quarter compared to 12.5% achieved in the fourth quarter of FY21, while two-year comparable sales growth in the first quarter increased to 19.2% compared to 13.1% achieved in the fourth quarter of FY21.
Coles said sales growth was driven by a strong performance in Liquorland, particularly in NSW and Victoria as a result of the closure of on-premise venues in both states, while online sales penetration increased to 4.5% in the first quarter compared to 3.6% in the fourth quarter of FY21.
Spirits and RTDs continued to be key drivers of growth at the category level. A targeted range activity in lighter red varietals, rose and sparkling wine, craft beers, gin and RTD seltzers translated into strengthening customer metrics. Coles said Exclusive Liquor Brand (ELB) and local product contribution also continued to grow.
Renewal activity continued across all three Liquor banners with 35 renewals completed with the new Black & White Liquorland trial format performing well. During the quarter, two new Liquor stores were opened, taking the
total network to 931 Liquor sites.
With the end of significant COVID-19 restrictions in sight, consumer savings at an all time high, and the recent launch of a new large range of great value easy entertaining, Coles said it was optimistic for the Christmas and holiday period as families and friends get together again.
Coles Group CEO Steven Cain (pictured main) said: “We expect to have the best Christmas ever as we mentioned a few weeks ago and obviously we are seeing a lot of premiumisation in both food and liquor so we expect people to spend more in Coles, more on food and also more on non-food as well.
“As we embarked on our third year of strategy execution, the COVID-19 Delta strain presented significant challenges in the quarter, which are now beginning to ease as vaccination rates increase. I would like to thank the Coles team, our suppliers and community partners who have done an extraordinary job in this 18-month battle with COVID-19 to ensure continuity of supply as an essential service.
“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.”