Wesfarmers Limited today announced its retail sales results for the first quarter of the 2018 financial year. "Coles’ headline food and liquor sales increased by 1.5 percent for the quarter as the business continued to invest proactively in all elements of the customer offer," said managing director Richard Goyder. "Sales growth was achieved despite significant fresh produce deflation during the period, and the business continued to see improvements in key metrics such as transaction growth, unit growth, fresh participation and customer satisfaction."
FOOD AND LIQUOR
Headline food and liquor sales for the first quarter1 were $7,968 million, up 1.5 percent on the prior corresponding period.
Comparable food and liquor sales increased 0.4 percent and comparable food sales increased 0.3 percent for the quarter.
Food and liquor price deflation was 2.3 percent during the quarter1, reflecting an acceleration in supply- driven fresh produce deflation during the period, particularly in soft vegetables, to the highest level since 2016. Excluding fresh produce, deflation for the quarter1 was 1.3 percent, broadly in line with fourth quarter deflation of 1.2 percent, excluding fresh produce.
Coles Managing Director John Durkan said excluding the impact of the significant fresh produce deflation, food and liquor comparable sales in the first quarter were broadly in line with the trend achieved in the 2017 financial year.
“As we outlined at our full year update in August, we continue to proactively invest in value, quality, availability and service for our customers. This underpinned continued improvements in transaction growth, unit growth and customer satisfaction in the quarter1. We believe our focus on a customer-led strategy will ensure Coles maintains its strong market position in a highly competitive market and will deliver sustainable long-term growth,” Mr Durkan said.
“There are still many opportunities for growth in the business,” Mr Durkan said. “We continue to focus on increasing our penetration in Fresh, improving our store network, investing in new routes to market, and simplifying our business in terms of range and our cost of doing business.”
“The liquor business continued to build on its positive sales momentum, largely led by Liquorland,”
Mr Durkan said. “The transformation to date has seen a focus on improving price competitiveness, range and the quality of the store network. Further opportunities remain as we continue to enhance our offering to customers through product innovation, exclusive brands, new channels and improved service.”
Coles continued to improve and optimise its store network, opening one supermarket and closing four during the quarter, resulting in a total of 798 supermarkets at the end of the period. During the quarter, 16 supermarket renewals were completed.
Liquor added to its store network, opening 11 new stores and closing six stores during the quarter. One hotel was also closed. At the end of the period, Coles had a total of 888 liquor stores and 88 hotels.
Total Coles Express sales, including fuel, for the quarter1, were $1,402 million, a decrease of 9.5 percent on the prior corresponding period, largely driven by lower fuel volumes.
Headline convenience store sales increased 2.7 percent for the quarter1 and 0.2 percent on a comparable store basis. Growth in convenience store sales continued to be driven by improvements to the overall food-to-go offering and convenience range.
For the quarter1, headline fuel volumes decreased 20.2 percent and comparable fuel volumes decreased 21.0 percent. Coles Express continues to work with its Alliance partner to provide a competitive and sustainable fuel offer. Average weekly fuel volumes achieved during the period were broadly in line with the fourth quarter. Coles’ strategy is to manage the business for an appropriate return and to focus on growing the convenience offering.
Coles Express continued to expand its network during the quarter, opening five new sites and closing one site, bringing the total network to 706 sites.