Coles sales lift 5.8 per cent

AAP
Oct 30, 2014, updated Oct 30, 2014

Supermarket giant Coles increased its food and liquor sales by 5.8 per cent to $7.3 billion in the first quarter.

Parent company Wesfarmers described the sales increase as “pleasing.”

Coles recorded comparable food and liquor store sales growth of 4.3 per cent in the first three months of the 2015 financial year.

Excluding liquor, comparable food store sales increased 5 per cent.

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Wesfarmers says tobacco excise increases and fresh food price rises due to tougher growing conditions partially offset gains from easing food and liquor price deflation.

Coles managing director John Durkan said comparable sales growth was driven by further value investments resulting in continued improvements in sales density, transactions, basket size and fresh participation.

However, the supermarket giant’s fuel and convenience store business, Coles Express, recorded a 2.3 per cent fall in total sales to $1.9 billion.

Wesfarmers says lower fuel prices during the quarter more than offset reduced fuel discounts after Coles and rival Woolworths agreed to the competition watchdog’s undertaking that they stop making fuel saving offers that were funded by other parts of their business.

Convenience store sales, excluding fuel sales, grew by 11.1 per cent, with like-for-like sales up 8.3 per cent.

Wesfarmers’ other businesses, Bunnings and Officeworks, achieved strong growth, while Kmart’s sales grew modestly but Target’s sales declined.

Target continues to be the poor performer in the group with total sales falling 4.6 per cent to $753 million.

Bunnings Warehouse sales rose 11 per cent to $2.2 billion, Officeworks’ sales climbed eight per cent and Kmart was up by 2.9 per cent, supported by good performances by the children’s home categories.

Wesfarmers’ managing director Richard Goyder says the sales results were generally pleasing.

“During the quarter our retail portfolio continued to invest productivity improvements into lower pricing, enhance merchandise offers and customer service, as well as improve its store networks,” he said.