UPDATE: Coles has just reported a surge in profits, revealing a 3.6% increase in group sales to $44.35 billion for the year. Despite this financial success, the supermarket giant faces a growing crisis with retail theft, as reported by Chief Executive Leah Weckert during a press briefing.
Coles’ innovative theft prevention measures, including enhanced camera monitoring and automated security gates, have successfully reduced stock loss volumes to 2015 levels. However, Weckert highlighted a troubling trend: “Despite the investments that we’ve made in safety initiatives for our team, we are continuing to see increases in threatening situations in store.” This situation is particularly alarming in Victoria, where retail crime rates are escalating.
As the retail landscape becomes increasingly hostile, Coles is not alone in facing these challenges. Competitors like Dan Murphy’s and BWS are implementing body-worn cameras and advanced technology to protect their staff. The surge in organized retail crime is punching a hole in sales, putting employees at risk, and prompting urgent calls for action across the industry.
Coles has also reported a 3.1% rise in underlying net profit, totaling nearly $1.2 billion. Their grocery segment saw sales increase by 4.3%, as the company focused on fewer promotions with deeper discounts, locking in everyday low prices across a broader product range. Weckert noted that this strategy has improved customer experience metrics, leading to larger basket sizes and increased transaction numbers.
The rising trend of online shopping is evident, with Coles’ e-commerce sales skyrocketing by 24.4% to $4.5 billion. This shift reflects changing consumer behaviors as Australians increasingly prefer the convenience of purchasing groceries online.
Investors reacted positively to Coles’ financial results, driving the share price up by 8.1%. This surge also benefited rival Woolworths, which gained 2.4% ahead of its upcoming earnings report.
Looking ahead, Weckert expressed optimism about evolving customer behaviors as interest rates begin to fall. She stated, “I think we’re seeing those green shoots around sentiment,” but acknowledged the uncertainty surrounding when these changes will fully manifest. The upcoming holiday season will be critical as families plan gatherings and outings, potentially influencing spending habits.
In terms of product offerings, Coles continues to focus on private label and exclusive products, introducing 970 new items this year. This category generated $13.7 billion in sales, indicating a strong market demand for unique and value-oriented grocery options.
Despite these gains, Coles faces external pressures. Inflation in the supermarket sector rose by 1.5%, with chocolate and egg prices remaining high due to supply chain issues and commodity price spikes. Tobacco sales plummeted by 30%, now accounting for less than 3% of total sales, down from 8% in fiscal 2019, as illicit tobacco sales rise.
As Coles navigates these complex challenges, the retail industry remains on high alert. The dual focus on enhancing safety for staff and maintaining competitive pricing will be pivotal in the months ahead. Stay tuned for further updates on this developing story as Coles and the broader retail sector respond to the ongoing crisis.
