Sales growth at Coles has slowed to a trickle

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The latest quarterly numbers from Wesfarmers show a further slowing in sales growth at Coles, due in part to more competition for Australia’s grocery dollar.

Analysts expect competitor Woolworths to creep ahead of Coles in sales growth when it announces its latest quarterly numbers next week.

Both Coles and Woolworths are under attack from discount players including the German chain Aldi which had been making inroads into the eastern states market.

Coles today announced headline food and liquor sales up 1.2% to $7.6 billion from the same quarter last year. Food and liquor sales for the financial year to date increased 1.9% to $24.6 billion.

However, comparable food and liquor sales for the three months increased just 0.3% and comparable food sales were 0.4% for the quarter.

The numbers are lower than the half year results which showed headline food and liquor sales up 2.2% and comparable food and liquor sales 1.3% higher.

Managing director Richard Goyder says the sales performance of the group’s retail businesses was generally pleasing given the later timing of Easter in the 2017 financial year.

“Coles’ headline food and liquor sales increased by 1.2% during the quarter, with the business investing more significantly in the customer offer,” he says.

Coles managing director John Durkan says the sales growth in food was broadly in line with the second quarter trend.

“It is necessary that we continue to proactively invest in the customer offer throughout this period of lower growth and increased competition to ensure we maintain our market leading customer offer,” says Durkan.

After adjusting for the later timing of Easter, comparable food and liquor store sales increased 0.7% and comparable food sales for the quarter 0.8%.

Food and liquor price deflation was 0.5% during the quarter and and 0.8% for the financial year to date.

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