Coles Group Ltd has recorded a profit increase to A$1.1 billion, driven by the popularity of Meat-free Mondays, a surge in online sales and the expanding range of home brand products as Australians increasingly dine at home amid rising living costs.
Revenue for the year ending June 30 rose by 3.2% to nearly A$43.6 billion, with net profits up by 2.1%.
Shoppers increasingly favoured Coles’ lower-priced private label products, which sold at double the rate of supplier brands.
Home brand sales increased by 8.6% to A$13.5 billion, with the Coles Finest range experiencing a 20.4% growth. The supermarket chain expanded its product range by more than 1,100 Coles-label items over the year.
Coles chief executive Leah Weckert highlighted the continued investment in the company’s home brand range, stating, “Do we think we’ve got a ceiling on this? If we do, we certainly haven’t seen it yet. So we will continue to invest and look to bring new value products into that range.”
Food sales in Coles supermarkets grew 4.3% to A$39 billion, while liquor sales remained steady at A$3.7 billion.
Price growth slows
In a positive development for consumers, Coles reported that price growth in its supermarket aisles had slowed, with inflation for non-tobacco products decreasing to 1.5% in the six months to June, down from 2.9% in the previous half.
While prices for meat, bread, avocados and apples have fallen, some fresh produce items, such as bananas and tomatoes, have seen recent price increases.
Weckert cautioned that chocolate prices might rise due to “inflationary headwinds” in cocoa.
Online grocery sales surged by 30.1% and liquor ecommerce saw a 9.2% increase.
To combat theft, Coles is deploying technologies like skip-scan checkouts, smart gates and “bottom of trolley” systems, with further rollouts planned for this year.
The company declared a fully franked final dividend of 32 cents per share, payable on September 25, following a first-half dividend of 36 cents.
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