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Coles not Immune to CODB Increases

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By Published On: February 27, 20240 Comments

Coles Group has revealed its first half results with sales up across the board and a growing digital presence, although profit has slipped.

Coles Group has announced its first half results, with the grocery giant reporting sales are up across the board, however with increased costs, profit is on the decline. 

Total group sales revenue is up 3.8 percent year on year, at $22.2 billion. 

NPAT has declined for the half, down 3.6 percent at $594 million across its supermarkets, liquor and “other” segment with a reported 27 percent increase in CODB. 

“We understand the cost of living pressures that many of our customers face, such as higher rent, mortgage, energy, and other household bills,” said Coles Group CEO, Leah Weckert. “That’s why we are working hard to deliver value to our customers every day. Over the last six months, we lowered the prices of hundreds of products through our “Great Value, Hands Down” campaign and we delivered additional value through a wide range of Exclusive to Coles products, weekly specials, and our Flybuys loyalty program. W

“Our renewed strategy delivered some early wins in our immediate areas of focus, with availability metrics improving, Simplify and Save to Invest benefits of approximately $90 million delivered and investments made in the customer experience through renewed stores across supermarkets and liquor, and enhancements to our ecommerce offering. We also worked at pace to take action against stock loss, with Skip Scan and Smart Gates operational in 305 and 267 stores respectively at the end of December.”

Its supermarket segment sales revenue totalled $19.8 billion. In that supermarket segment, ecommerce sales increased by 29.2 percent to $1.8 billion (33.5 percent in the second quarter) with penetration at 9.1 percent. Coles says this growth was driven by a strong performance in seasonal events, particularly Christmas and Black Friday, improvements in availability, enhancements to the customer experience and continued network expansion. 

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). Online NPS increased by 3.5 points with improvements across both Home Delivery and Click & Collect consistent with the enhancements in availability and customer interface.

Other digital investments in the half include a range of artificial intelligence and technology automation initiatives that were also successfully implemented in customer call centres while pick optimisation initiatives improved efficiency. 

App active members grew by 42.3 percent, and Flybuys membership grew by 9.5 percent with 818k new active members. 

Coles Group Chairman, James Graham stated: “during the half year, we remained focused on delivering for all of our stakeholders. We are committed to continuing to invest in value for Australian households, supporting our suppliers and communities and delivering returns to our shareholders. 

“Recognising the significant cost pressures within the business, it is pleasing to have delivered Net Profit after Tax on a reported basis of $594 million and a stable fully franked interim dividend of 36 cents per share.”

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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