Agribusiness

Coles, Woolies both show solid first quarter sales rises

Jon Condon 26/10/2012

 

Both Coles and Woolworths have reported strong lifts in sales for the first quarter of the 2012/13 financial year, ended September 30.

Wesfarmers' Coles/Bi-Lo supermarket division recorded comparable food and liquor sales growth of 3.7 percent for the quarter, compared with last year, building further on strong growth achieved in the June quarter.

Woolworths was up 4.6pc by the same measure.

“Pleasing transaction and volume growth was achieved in the period, ahead of sales growth, as Coles continued its focus on improving product quality, service and value,” Wesfarmers' managing director Richard Goyder said.

Overall Coles food and liquor division sales for the first quarter of 2013/14 financial year were $6.6 billion, up 4.9pc on the previous corresponding period.

The supermarket division experienced food and liquor price deflation of 3.2pc during the quarter as a result of ‘investment in lower prices and ongoing fresh produce deflation,’ Mr Goyder said.

Coles has now recorded food and liquor price deflation for 12 of the past 13 quarters. However, with rising fresh produce prices this is expected to moderate through the course of the year.

Coles managing director Ian McLeod said investment in lower prices remained a key focus during the quarter, including the ongoing ‘Down, Down’ campaign, resulting in further strong volume growth. 

“Our customers are as focused on value now as they have ever been, with consumer sentiment still slow to recover to levels seen last year. As a result, customers have rewarded our efforts to maintain lower prices with more than three million extra transactions every week compared to just four years ago.”

Mr McLeod said the rollout of key business initiatives continued during the quarter, with a new state-of-the-art distribution centre in Truganina now servicing stores in Victoria.

During the September quarter, Coles opened one new supermarket and closed three others, leaving a net total of 747 outlets across Australia.

 

The Coles Q1 result compares favourably with that posted by Woolworths a week earlier.

Woolworths announced division-wide first quarter sales of $14.8 billion, an increase of 4.7pc on Q1 the previous year. Food and Liquor sales for the quarter were $10.1 billion, up 4.6pc over last year. Comparable store sales for the quarter increased 2.3pc. Market share, customer numbers and items sold all increased.

Chief executive Grant O’Brien said the momentum experienced towards the end of the last financial year had continued through the first quarter.

“The Australian Food and Liquor business increased market share, customer numbers and items sold compared to the same period in the prior year. Effective promotional activities and the return to inflation in produce have assisted this result,” Mr O’Brien said.

The supermarket division served on average, 19.6 million customers per week, an increase of 4.6pc when compared to the same period a year earlier.

Australian supermarkets managing director Tjeerd Jegen said the company’s sales increase had happened particularly during the latter half of the quarter.

“This has been driven by our recent promotional initiatives including ‘Extra Specials’, ‘Sticky Specials’ and ‘Lamb Cuts for Less’ promotions. Sales growth was also assisted by the return of produce to inflation and the commencement of Sunday trade in WA at the end of August,” he said.

The standard shelf price movement index for the first quarter was inflation of 0.8pc (compared with deflation of 0.7pc in the June quarter), representing a return to inflation after three consecutive quarters of deflation.

Woolworths opened eight new supermarkets during the quarter bringing its national total to 879. On-line retail sales increased by 30pc for the quarter.

 

 

 

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