Sales growth at Coles is still behind Woolworths

William West/AFP/Getty Images
  • Coles headline food and liquor sales for the third quarter were up 1.9% to $7.8 billion.
  • However, the latest numbers for Woolworths show Australian food sales rose by 4.9%.
  • Bunnings Australia is the big winner for Wesfarmers with total sales growth of 8.9% to $3.04 billion for the quarter.

Sales growth at Coles, the Wesfarmers’ supermarket division heading for a separate ASX listing, is staying in positive territory.

Headline food and liquor sales for the third quarter were $7.8 billion, up 1.9%. Comparable sales were up 0.9%.

Food and liquor sales for the financial year to date increased 1.9% to $25.1 billion.

The percentage sales growth numbers are the same as those for the latest half year.

Coles has been lagging its main competitor Woolworths in sales growth. For Woolworths, Australian food sales rose by 4.9% for the latest half year. It is due to release its third quarter sales next week.

The two big supermarket players face market erosion from a series of digital and discount players including Aldi and Amazon.

Westpac Managing Director Rob Scott says the sales performance of the company’s retail divisions is pleasing.

Bunnings Australia and New Zealand delivered another strong quarter, with sales growth of 8.9% to $3.04 billion.

However, sales fell at Bunnings United Kingdom and Ireland by 6.5% to $374 million, and 13.5% in local currency terms.

Kmart’s total sales growth accelerated 10.2% to $1.25 billion. Target’s total sales fell 2% to $544 million.

Officeworks delivered sales growth of 7.2% to $598 million.

Coles Managing Director John Durkan says sales momentum continues to steadily build.

“Continued improvement in customer satisfaction levels was a highlight for the quarter, particularly in the areas of customer service, range and availability, which supported continued growth in customer transactions,” says Durkan.

“Online sales growth accelerated in the quarter as we continued to focus on meeting the changing needs of our customers.”

Coles plans to open four supermarkets and closed three during the quarter, resulting in a total of 807 stores.

The sales numbers in detail:

Source: Wesfarmers

Wesfarmers plans to keep a minority ownership interest of up to 20% in Coles and a substantial ownership stake in the supermarket chain’s loyalty program, flybuys.

A separate Coles would become a top 30 ASX company with $39.2 billion in revenue and 109,000 staff.

Wesfarmers acquired Coles, in Australia’s biggest corporate takeover, for $19.3 billion in 2007.

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