URGENT UPDATE: Coles Group Ltd (ASX: COL) has reported a remarkable 13.5% surge in share value for 2025, while Woolworths Group Ltd (ASX: WOW) suffered a 3.6% decline, raising immediate questions for investors about which supermarket giant to bet on for 2026.
This significant divergence in performance is critical for investors as both companies together command a staggering 67% of Australia’s supermarket grocery sales, according to the Australian Competition and Consumer Commission (ACCC). With their dominance, movements in their stock prices can have widespread implications for consumer staples portfolios.
Last year, Coles benefitted from robust supermarket sales growth, with its earnings before interest, taxes, depreciation, and amortization (EBITDA) soaring 11% and EBIT increasing 7.5%. In stark contrast, Woolworths faced a tumultuous period, with earnings missing analysts’ expectations. A shocking 12% drop in Woolworths shares followed the August earnings announcement, revealing a 12.6% decline in EBIT to $2.75 billion and a 17.1% drop in net profit after tax to $1.39 billion.
Experts are now weighing in on what this means for investors in 2026. Coles is projected to continue its upward momentum, with Macquarie maintaining a bullish outlook and setting a price target of $26.10, suggesting a potential upside of over 21% from its current share price of $21.44. Meanwhile, TradingView forecasts a 12-month price target of $23.83 for Coles, granting it an additional 11% potential growth.
Investors seeking defensive stocks, which typically weather economic downturns better, may find both companies appealing. Demand for essential groceries remains high, making Coles and Woolworths attractive during volatile market conditions.
On New Year’s Eve, The Motley Fool’s Samantha Menzies underscored Woolworths as potentially undervalued after its disappointing performance in 2025. This perspective could sway investors looking for recovery plays in the supermarket sector.
As we enter 2026, the focus shifts to how these supermarket giants will adapt to changing consumer behaviors and economic pressures. Will Coles maintain its upward trajectory, or can Woolworths rebound from its 2025 struggles? Investors are urged to watch these developments closely, as they could shape the future of the Australian retail landscape.
Stay tuned for further updates on Coles and Woolworths as the year unfolds, and consider the implications of their performance on your investment strategies.
