Sales at Coles, the supermarket chain owned by Wesfarmers, improved during the six months to December but is unlikely to catch up with competitor Woolworths in the short term.
Headline food and liquor sales were up 1.9% and comparable sales were 0.9% higher over the six months, with stronger growth in the second quarter, the highest in six quarters.
Food and liquor prices fell by 1.6% in the first half, underpinned by seasonally lower fresh produce prices.
The company says sales momentum is expected to continue in the second half.
However, overall revenue is weaker at $19.98 billion, down 0.4% in the first half. And EBIT was down 14.1% to $790 million.
The Coles numbers for the first half:
Managing director Rob Scott says the decline in earnings reflect investments made in the customer offer, lower property earnings due to a one-off gain in the prior year, lower financial services earnings following the sale of Coles’ credit card and lower fuel earnings.
“Coles maintained good sales momentum during the half, with transaction growth accelerating in the second quarter and reaching the highest level of quarterly comparable transaction growth in six quarters,” says Scott.
“The business continued to improve its customer offer across value, quality, product innovation and service, resulting in overall improvements in customer satisfaction metrics.”
Numbers for Coles’ main competitor Woolworths are being released on Friday.
However, Woolworths has been outpacing Coles on sales.
In the latest market update, Australian food sales at Woolworths were up 4.7% to $9.63 billion in the first quarter of 2018. Like for like sales were 4.9%.