Coles has released its third quarter figures, showing solid sales growth and detailing a strong performance by stores it has converted into the First Choice Liquor Market brand.
Liquor sales revenue for the third quarter were $735m, up 4.3 per cent on the prior corresponding period. Comparable sales growth was impacted by New Year’s Eve, which fell in the third quarter of this financial year compared to the second quarter last year. Comparable sales growth was 3.5 per cent for the quarter and 0.9 per cent on a NYE adjusted basis.
Coles said that the result was driven by improvements in the average basket size and transaction numbers. The group added that the spirits category was the strongest performer in the quarter.
In 2016 Coles launched a new retail liquor brand, with its Liquor Market store. Since then it has begun converting a number of First Choice stores into First Choice Liquor Market and today the group detailed how that conversion is working for them.
“The First Choice format continued to evolve with four First Choice Liquor Market brand conversions completed during the quarter, bringing the total number of conversions to 19,” Coles said in its third quarter report.
“An additional 10 conversions are scheduled to be rolled out in the fourth quarter. Converted store sales grew by almost double the rate of unconverted stores, with customers responding positively to the renewed format and range on offer.”
Detailing the performance of its other retail brands, Coles added: “Trading conditions for Liquorland were impacted by a subdued market and lower promotional intensity in beer, particularly in January. Exclusive Liquor Brand (ELB) growth continued to be strong in the wine category, lifting ELB penetration and Liquorland’s market share in the wine category.
“Trading conditions for Vintage Cellars remained challenging during the period, largely driven by softer growth in the wine category and two store closures.”
Coles said it is continuing to invest in its store network and that four new stores opened in the quarter, two closed leaving the group with 91 retail liquor sites at the end of the reporting period.
Overall Coles reported its 46th consecutive quarter of comparable sales growth, with supermarket sales up 3.2 per cent, while Coles Online grew by 27 per cent, with sales of over $1bn on a rolling 12-month basis.
Coles Group CEO Steven Cain said: “We delivered a solid outcome for the third quarter. We know that customer expectations are changing faster than ever, and we are resolutely focused on delivering our Fresh Tomorrow strategy.
“We were also pleased to provide support for communities impacted by natural disasters such as floods in Far North Queensland, bushfires in Tasmania and Victoria, and Cyclone Veronica in WA.”