Coles Liquor has delivered its sales results for the March quarter, which saw sales revenue decline by 3.9% to $781 million, with comparable sales decreasing 4.3%.
Coles said sales across its convenience portfolio, representing approximately 90% of its store network, remained resilient and broadly in line with the prior corresponding period, while its warehouse stores continued to experience a more pronounced
impact.
The Group noted that the market remained highly competitive and soft trading conditions persisted during the quarter, particularly in March as consumer sentiment weakened amid heightened geopolitical uncertainty in the Middle East.
Coles said that in response to the current environment and longer term consumer trends, it remained focused on delivering a
convenient liquor offer, underpinned by trusted value and an increasing focus on leveraging its integrated food and drink proposition.
It also reported that customer metrics had increased, reflecting an enhanced customer experience across its network following our Liquorland banner simplification.
There was increased Flybuys engagement, with swipe rates increasing by 7.2%, and eCommerce sales revenue increased by 1.8% with penetration of 7.4% (8.6% including liquor sold through Coles Online), with growth supported by Coles’ expanded partnership with Uber Eats.
Coles said liquor sales continued to be impacted in the June quarter by the step down in consumer sentiment observed in March. As a result, it is currently expecting flow on impacts to liquor earnings reflecting reduced fixed cost fractionalisation
across the second half.
Coles Group CEO Leah Weckert said: “We know value and availability will be important to our customers over the months ahead and we are well placed to respond to this with our extensive own brand portfolio, our leading eCommerce platforms and the strength of the infrastructure and capability that sits within our supply chain.”
EToro analyst Josh Gilbert said: “Rising fuel, freight and packaging costs are hitting the business directly, while suppliers are increasingly knocking on the door to request price increases.
“Coles will absorb costs where it can, but ultimately, the pressure is building, and the second half is going to be tougher than the first.”