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Coles profit falls by 8.4% while online sales increase

Coles profit falls by 8.4% while online sales increase
Coles profit falls by 8.4% while online sales increase

Coles supermarket in Australia has made “good progress” and experienced “strong growth” in e-commerce in its first half-year results, which were released Tuesday. 

CEO Leah Weckert says this comes against the backdrop of customers experiencing financial pressures. “We also made significant investments in value during the half (HY2024) when we know the financial pressures many of our customers face.”

Strong e-commerce growth 

Coles’ e-commerce sales grew 29.2% in groceries to $1.8 billion and 14.9% in liquor. This growth can be compared to the same period in 2023 when e-commerce sales declined by 6.6%. 

The sales for groceries online were mostly driven by the “improved availability” of products and key seasonal events as well as campaigns.

When it comes to selling alcohol through its online platform, Coles says customers were seeking “value and managing their overall spending.” They’ve noticed that customers’ basket growth was “modest” while units were down relative to the same period in 2023.

The e-commerce sales penetration at 9.1% was largely driven by “strong performance in seasonal events.” The Christmas and Black Friday events, combined with the accessibility of certain products, added value to customers’ online experience. Rapid Click & Collect is now available in 621 stores (15 stores added), and Home Delivery Rapid is now available in 487 stores (7 stores added). 

Overall profit down

Coles’ half-year statutory net profit is AUD$589 million. That’s a decline of 8.4% compared to 2023. James Graham, the group chairman says the results are pleasing. “We delivered a net profit after tax on a reported basis of $594 million.” This comes amid “significant cost pressures” within the business, he says. Coles also reported a stable fully franked interim dividend of 36 cents per share.

“During the half year, we remained focused on delivering for all of our stakeholders,” says Graham. With strong criticism from the public and claims of profiteering, Graham is adamant that the company remains “committed to continuing to invest in value for Australian households, supporting our suppliers and communities.”

Cost of living concerns

Coles is one of the supermarkets under investigation by the Australian Competition and Consumer Commission (ACCC). Customers are complaining about high grocery prices amid tight cost of living pressures. 

However, Weckert says the supermarket does “understand the cost of living pressures that many of our customers face. She says that’s why they are “working hard” to deliver value to customers. She didn’t want to elaborate on this topic during a media briefing. 

However, she told investors: “Over the last six months, we lowered the prices of hundreds of products through our Great Value, Hands Down campaign.”

Weckert acknowledges this is sensitive, as “price matters to our customers, especially during the festive season.” Coles claims it worked with suppliers in December to improve the quality and the prices to help Australians. 

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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