- Coles will spend $2.5 billion over the next two years on better online shopping capabilities, data systems and new self-serve checkouts.
- Coles investments will be largely weighted towards technology, with data, online and automation all set to get a boost.
- Coles will also accelerate the roll-out of its new format Liquorland stores as part of a broader strategy to simplify and grow its formerly struggling liquor division.
- Visit Business Insider Australia’s homepage for more stories.
Supermarket giant Coles will spend $2.5 billion over the next two years on better online shopping capabilities, data systems and new self-serve checkouts as the business seeks to put itself on a stronger footing in the wake of the COVID-19 pandemic.
At an investor day on Thursday, Coles unveiled its plan to grow its business over the coming years through a range of new investments, with chief executive Steven Cain saying the company is set to spend an additional $1.4 billion next financial year on top of the $1.1 billion spent in the current financial year.
“There’s a myriad opportunities facing us. The market in Australia is very good for food and liquor. It’s growing, there’s plenty of opportunities, and we think we’ve got the assets to exploit some of them,” he said.
“It’s making sure you’re confident that you’ve got the right returns before you press the accelerator. And I think what we’re saying today is we’re pressing the accelerator.”
Though panic buying during the pandemic was a boon for the supermarket giant, Coles lost market share during COVID as it has fewer stores in local, neighbourhood locations preferenced by shoppers during the pandemic. The business revealed its market share dropped by as much as 1.3 per cent, a trend it is now looking to reverse.
Coles investments will be largely weighted towards technology, with data, online and automation all set to get a boost. The company is working with international technology companies Witron and Ocado to build automated warehouses and fulfilment centres, benefits of which Coles expects to start flowing through to sales and profits by the 2024 and 2025 financial years.
The supermarket will double its investment in online systems by investing in better ordering systems, analytics and more technology within its stores, with the business finding that customers who shop both online and in-store spend twice as more with the retailer.
Mr Cain admitted some of the company’s flurry was due to it being previously under-invested in online while the business was owned by Wesfarmers.
“When the demerger happened, Coles was not advanced as a technology company, but with three more years to go, I think Coles will have transformed into one of the best global technology retailers,” he said.
One part of Coles’ big spend will also being on transforming the company’s front-of-store systems, which Mr Cain said would include rolling out larger self-serve checkouts aimed at trolleys, along with plans for systems which would allow customers to checkout using their mobile phones.
Coles will also accelerate the roll-out of its new format Liquorland stores as part of a broader strategy to simplify and grow its formerly struggling liquor division.
As part of these investments, Coles expects to book between $1.67 billion and $1.72 billion in depreciation and amortisation in the 2022 financial year.
This story originally appeared in the Sydney Morning Herald. Read the original story here.