Coles Liquor has reported a third quarter decline of 1.9 per cent in sales revenue and a 3.1 per cent decline in comparable sales to a total of $786m, as customers reduced their discretionary spending in the third quarter of FY2024.
Coles also cited a transition away from less profitable bulk sales and an adjustment to its promotional mix across eCommerce channels as a cause of the sales revenue decline.
It was better news in the eCommerce business where sales revenue grew by 4.1 per cent with penetration of 5.7 per cent (6.4 per cent including Coles Online), which the retailer said was underpinned by strong growth in the on-demand channel.
In its results statement to the ASX, Coles said: “Increased investments were made in value and loyalty with successful cross promotions through Flybuys between Supermarkets and Liquorland across Valentine’s Day and Easter with swipe rates increasing across all banners.
“Consistent with our Supermarkets offer, instant $10 off points redemption was also introduced at check out for Flybuys members in Liquorland and First Choice Liquor Market stores.
“The Exclusive Liquor Brand (ELB) portfolio also provided affordable choices to customers with 39 new lines added during the quarter and more than 80 awards received, including a Gold award and being named Country Winner at the World Vodka Awards 2024 for Pure Origin Tasmanian Vodka.”
Overall, Coles reported revenue from continuing operations rose to $10bn in the quarter, up 3.4 per cent from the corresponding period a year prior.
Speaking on the group’s result, CEO Leah Weckert said: “We have delivered another solid sales result across our supermarkets this quarter reflecting strong execution of our trade plans and our continued focus on delivering great value and great quality alongside improved availability.
“We have also seen a meaningful increase in customers interacting with our digital platforms and loyalty programs which is allowing us to engage on a more personalised basis with these customers.
“I’m also pleased to report that we are delivering on our commitment to address loss with a positive trajectory throughout the quarter.”
Looking ahead, she added: “We remain committed to providing our customers the best possible value on their grocery bills. We are well positioned in the current economic environment as we continue to invest in value, including through our Autumn value campaign with the prices lowered on 300 products in store and online.
“Our recently launched KitchenAid Ovenware campaign provides additional value to customers who will be cooking more at home through the cooler months.
“Looking forward, I believe that the opening of our Kemps Creek Automated Distribution Centre and our two CFCs will be yet another step on our road to improving operating efficiency and differentiating our offer.”
Coles said it expects discretionary spending on liquor to remain subdued and that the early part of the fourth quarter, liquor performance has been broadly in-line with the third quarter.
Across the Liquorland, Vintage Cellars and First Choice banners 17 store renewals were completed, three new stores were opened and three stores closed. At the end of the period the portfolio comprised 964 stores.