It will be a price-sensitive Christmas for liquor retailers according to Coles, with shoppers seeking more budget-friendly options as the cost-of-living crisis continues.
Coles Group CEO Leah Weckert said: “[Consumers] are already changing their behaviour and how they shop to access more value, and I would expect that will continue now through to Christmas.”
Coles Group reported liquor sales revenue of $851 million for the first quarter of FY23/24, an increase of 1.8% compared to the prior corresponding period.
Gross retail sales of $853 million increased by 1.7% and comparable sales grew by 0.1%. Taking into account the timing of
the AFL Grand Final, which fell in the first quarter of the prior corresponding period, sales revenue increased by 2.5%3
Sales growth during the quarter was supported by eCommerce growth of 32.2% driven by strength in the on-demand
channel. Penetration increased to 6.5% for the fourth quarter (7.7% including Coles Online).
New stores also contributed to sales growth with three new stores opened during the quarter and 19 stores opened in the second half of FY23.
In the beer category, Coles reported customers shifted back to mainstream and international brands, away from craft beer. In wine, growth in sparkling, prosecco and rose was offset by lower champagne sales.
The ready-to-drink category also grew strongly as customers traded out of full bottled spirits into more affordable ready-made drinks.
Coles said its Exclusive Liquor Brand (ELB) portfolio continued to resonate with customers with revenue growth outperforming the broader liquor division and more than 150 new lines added to the portfolio. ELB revenue grew by 2.4% for the quarter compared to the prior corresponding period with penetration increasing to 22.1% of sales revenue.
During the quarter, 37 store renewals were completed, three new stores were opened and two stores closed across the
Liquorland, Vintage Cellars and First Choice banners. At the end of the period the portfolio comprised 958 stores.
“Our expanded Exclusive to Coles brand portfolio across food and liquor has never been more important, while collectible campaigns have also provided value to customers,” Weckert said.
“Pleasingly for customers, availability continues to improve and inflation in key categories is moderating.”
Coles Liquor outlook for 2023/24 financial year
In the early part of the second quarter, Coles said supermarkets and liquor sales revenue growth were broadly in-line with the first quarter.
“We continue to focus on delivering value across our everyday prices, Down Down offers, weekly specials and promotions, personalised Flybuys offers and our exclusive brand range,” Coles said.
“We have new products for Christmas and summer entertaining across supermarkets and liquor for which sales results are encouraging and expect more customers to be cooking and entertaining at home this season.”