An almost 13 per cent upswing in sales revenue for Coles Group in 3Q20 is already trending back to pre-pandemic levels, Coles announced today.
The supermarket giant recorded a 12.9 per cent sales revenue increase in 3Q20 to $9.2 billion, with supermarkets seeing a 13.1 per cent increase ($8.2 billion) compared to the same period last year and liquor 7.2 per cent ($740 million).
Gross operating capex in FY20 is now expected to be in the range of $750 million to $850 million subject to any unexpected COVID-19 impacts in the final two months of the year.
Group CEO Steven Cain expressed thanks to staff and suppliers for their “enormous efforts” throughout the bushfire crisis, floods and COVID-19 pandemic.
He said supermarkets had been performing strongly before the impact of COVID-19. Liquor had been negatively impacted by bushfire smog and floods in January and February and the virus in March.
Cain said the company would continue its multibillion-dollar capital and operating expenditure plans. In 3Q it completed range reviews across more than 30 categories including snacks and coffee.
More than 260 Own Brand products were introduced, including its Graze grass-fed lamb from Tasmania.
Own Brand recorded 15 per cent sales growth in the quarter, growing faster than proprietary brands. It achieved sales contribution of 30 per cent for the quarter.
The company’s renewal program was “back in full swing” following a slowdown in the third quarter due to delays in refrigeration equipment being shipped out of China, and meat export sales are now back on track (Food & Drink Business, 19/02/2020).
Six supermarket renewals were completed, and three new shops were opened. Its Liquor unit opened two stores and closed six. Refreshed websites across its three Liquor banners increased online sales by 34 per cent in the quarter.
Latest figures from CBA’s Household Spending Intentions Series show household spending was down 18 per cent on the corresponding period last year (Food & Drink Business, 24/04/2020).
In the first four weeks of the fourth quarter, Coles has seen an increase in basket size which has been partially offset by a decline in transactions driven by social distancing measures.
Cain said: “As more customers either work at home or stay at home there is early evidence of customers changing their habits, purchasing less convenience and impulse products and moving towards more cooking and baking from scratch.”
It was unclear how long the pandemic impacts would continue to have affect the business, which was largely dependent on the extent or timing of existing and future Government measures, he said.
