Coles Liquor has continued to deliver on its transformation plan with comparable sales growth for the year and fourth quarter, despite overall earnings decreasing for the supermarket giant.

Wesfarmers delivered its full year results today showing that Coles’ earnings decreased 6.8 per cent to $1.5bn for the full year, with revenue broadly in line with the prior year. For the group as a whole it was a bleaker story with profits down by over 58 per cent to $1.19bn, which Wesfarmers said was largely caused by the failure of its Bunnings UK and Ireland venture.

Coles food and liquor recorded sales growth of 2.1 per cent, with comparable sales growth of 1.1 per cent for the year and 1.8 per cent for the fourth quarter.

Wesfarmers’ Managing Director Robert Scott said: Sales momentum in supermarkets steadily improved during the year, driven by growth in customer transactions, units sold and average basket size.

“Continued improvements in the customer offer delivered earnings growth of 3.0 per cent in the second half of the financial year, although full-year earnings were below the prior year due to the annualisation of customer investments and the impact of one-off items in the first half.

“The Coles Liquor transformation was progressed with the business achieving its third consecutive year of positive sales growth. Revenue and earnings for the Convenience business were lower than the prior year due to lower fuel volumes while store sales continued to grow.”

In detailing the performance of Coles Liquor, the company said: “Liquor achieved positive comparable sales growth for the year and fourth quarter. The transformation program continues to build on an improved and more consistent customer offering as pricing, range and renewal of the store network is further refined. Significant opportunities remain for the business to create a point of difference through improving the Exclusive Brand portfolio and Liquor Direct channel.”

Food and Liquor reported revenue of $33.6bn, 1.6 per cent above the prior year, while headline food and liquor sales for the year were 2.1 per cent above the prior year. Comparable food and liquor sales increased 1.1 per cent for the year, with comparable food sales also increasing 1.1 per cent.

For the fourth quarter the company reported that headline food and liquor sales increased 2.6 per cent to $8.2bn. Comparable food and liquor sales increased 1.8 per cent, with comparable food sales growth of 1.8 per cent. On an Easter-adjusted basis, comparable food and liquor sales increased 1.9 per cent for the period.

At 30 June 2018, Coles had a total of 809 supermarkets, 899 liquor stores and 88 hotels, the liquor stores comprise: 98 1st Choice, a net loss of one for the year; 84 Vintage Cellars, up two; and 717 Liquorland a net gain of 15 for the year.

The company also spoke about its plans to demerge Coles later this year, saying: “Significant progress has been made on the demerger of Coles, which is expected to be completed in November 2018.

“The post-demerger capital structure, announced in July 2018, is expected to set Coles up for success and provide the business with significant operational and strategic flexibility. Coles’ balance sheet will have substantial headroom and allow it to make additional investments in new stores, the next evolution of store renewals, online capability, supply chain and deliver on its ‘Fresh Tomorrow’ strategic initiatives.”


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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