Coles Liquor has reported its half-year results, as part of the overall results update from the wider Coles Group.
Within the liquor division sales revenue increased by 0.8 per cent to $2bn, when compared to the prior corresponding period. Performance improved across the half with sales growth in the second quarter of 1.5 per cent and sales growth excluding bulk and affiliates of two per cent Comparable sales in the second quarter grew by 1.2 per cent compared to a decline in comparable sales of 4.4 per cent in the first quarter.
In its statement to the ASX, Coles said of its liquor division: “The market continues to be subdued as economic pressures impact discretionary spending, however we saw a slight recovery in November and December.
“Sales were supported by strong trading across key events including Cyber Week, Spring Racing and Christmas, coupled with improved availability following the roll out of Liquor Easy Ordering to more than 300 stores during the period.
“Our ‘Summer of Flybuys’ campaign also resonated with customers, offering additional Flybuys points for selected products across November and December, increasing swipe rates across all banners.
“In December we saw a moderate increase in demand in Victoria, particularly in the Ready-to-Drink (RTD) and beer categories, following competitor supply chain disruption in Victoria equating to approximately $8m in sales. However, the incremental increase in sales and earnings from the event were broadly offset by the impact of the CrowdStrike outage in the first quarter.
“eCommerce sales revenue increased by 9.2 per cent with penetration increasing to 6.9 per cent (8.2 per cent including liquor sold through Coles Online) reflecting continued growth in the on-demand channel, particularly across Cyber Week.”
The group also said its exclusive liquor brands continue to be successful across all categories and price points, with 139 new lines added across key growth categories including craft beer and RTDs.
The half also saw Coles Liquor continue its store upgrades and banner simplification, with 14 stores converted to Liquorland, Liquorland Cellars or Liquorland Warehouse.
Coles said: “One-off costs of $1.5m were incurred in relation to the simplification of our above store operating model as well as investments in the banner simplification pilot. Excluding these one-off costs, EBIT declined by 18.5 per cent.”
Overall the Coles Group reported total sales revenue of $23.03bn, up 3.7 per cent on the first-half last year, with profit from continuing and discounted operations of $576m, down 2.2 per cent on last year.
Looking ahead Coles said: “In Liquor, whilst discretionary spending remains subdued, we have continued to see positive momentum in the third quarter, with sales revenue growth in the first seven weeks of 3.8 per cent.
Coles Group CEO, Leah Weckert, said: “Our focus in the second half remains on providing a compelling customer value proposition, making further progress on improving our fresh offer and continuing to tailor our ranges to make sure we have the right products in the right stores to cater for local customer preferences.
“We also remain focused on delivering the benefits from our major transformation investments, including optimising our ADCs and providing a best in class experience for our CFC customers.”