Coles Group has reported its results for the first half of the 2023 financial year and while it was good for the overall business with revenue, earnings and profit all increasing, it was more challenging for the liquor business, with a fall in earnings and revenue.

Overall the group reported an 11.4 per cent increase in net profit after tax to $616m, with sales revenue up 3.9 per cent to $20.8bn and earnings up 9.9 per cent to $1.06bn. Coles Liquor revenue dropped 2.4 per cent to $1.95bn and earnings fell by 19.2 per cent to $80m.

Coles said the liquor the business cycled approximately 15 weeks of COVID-19 related on-premise closures and restrictions in the prior corresponding period across Victoria, New South Wales and the Australian Capital Territory. For the second quarter, comparable sales growth decreased by 0.9 per cent relative to a

decrease of 4.1 per cent in the first quarter, reflecting a reduction in on-premise restrictions from the prior year throughout the quarter, and the impact on sales revenue of supplier led cost price increases for a full quarter across the beer, sprits and Ready-to-Drink (RTD) categories. In the first half, sales revenue growth was positive, excluding the lockdown states of Victoria, New South Wales and the Australian Capital Territory.

Ecommerce was a highlight for the liquor business, with revenue growth of 13.7 per cent, with Express delivery now available in more than 560 stores and Click & Collect now available in more than 70 First Choice Liquor Market stores.

Liquorland continued to be the strongest performing banner with more than 370 Black and White Liquorland stores now completed. RTD was the strongest performing category.

Across the portfolio, Liquor completed 128 store renewals during the half, including 112 Black and White renewals, opened 16 new stores and closed nine stores. At the end of the period the portfolio comprised 940 stores.

Speaking about the overall Group performance, CEO Steven Cain said: “We continue to make progress on growing long term shareholder value by executing our strategy, whilst recognising the significant ongoing challenges facing many of our customers and suppliers.

“Many of our suppliers are however still facing increasing cost pressures and shortages of pallets, raw materials and labour. This has been coupled with increased severe flooding impacting our road and rail networks, particularly for Western Australia and Far North Queensland. We are working together with our suppliers, and both State and Federal governments, to improve food supply chain resilience for all Australians.

“Once again, our team has shown amazing support for the needs of our local communities, in particular during the floods in New South Wales and Victoria.

“In January, our first Witron automated distribution centre in Queensland, the largest in the Southern Hemisphere, began receiving in-bound inventory deliveries. This along with our other three major automation projects, that are in various stages of internal fit out, demonstrate our commitment to innovation and continued long term investment in supply chain efficiency and customer experience.”

Looking ahead he added: “In Liquor, we expect earnings to return to growth in the second half as we exit COVID-19 cycling and focus on building sales momentum, partially assisted by the February excise increase, and continuing to drive ELB growth.

“We are well positioned to navigate the current macro environment and as we look to the future, we expect improving availability, population growth and moderation in out of home dining, which has been elevated post-COVID-19, to positively impact the business and provide further opportunities for growth.”

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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