A third year of strategy execution delivered solid supermarkets sales and earnings despite significant Covid-19 and flood disruptions, reported Coles Group in its 2022 Full Year Results.
Despite cycling significantly elevated Covid-19 driven demand in the prior corresponding period, FY22 Group sales revenue of $39.4 billion increased by 2.0% in FY22 (12.4% on a three-year basis). Group gross retail sales of $40.5 billion increased by 2.7% (13.3% on a three-year basis).
“We have now delivered the third year of our transformation strategy, including significant growth in our eCommerce operations, coupled with additional efficiencies from our Smarter Selling program,” said Coles Group CEO Steven Cain.
“We continue to focus on delivery of our vision to be the most trusted retailer in Australia and grow long-term shareholder value.”
Express impacted by lockdowns
C-store sales revenue was $1.1 billion for the year, a decrease of 5.0% on the prior corresponding period, however increased by 8.1% on a three-year basis.
Coles attributes the performance to lower forecourt traffic due to lockdowns in NSWs, Victoria and the ACT and reduced mobility from the Omicron variant and flood events in NSW and Queensland.
The cycling of strong tobacco sales in the prior corresponding period due to the impacts of Covid-19 also had an impact. Excluding tobacco, c-store sales grew by 0.9% in FY22 with strong growth in food-to-go, including coffee and hot fast food, as well as drinks following recent range review activity.
During the year, Express completed the successful national roll-out of the Shell Coles Express App, providing customers with Pay at Pump and Store Locator functionality as well as monthly c-store offers.
Fuel volumes declined by 4.7% during the year with comparable fuel volumes declining by 3.8% driven by lockdowns and flood events. Average weekly fuel volumes of 54.4mL per week were recorded during the year.
For the year, one Express site was opened and seven closed, taking the total network to 711 sites.
Supermarkets adapt to demand
Supermarkets sales revenue was $34.6 billion for the year, an increase of 2.2% on the prior corresponding period and 12.0% on a three-year basis.
Coles attributed sales revenue growth to the successful execution of trade plans throughout the year, as well as value campaigns focused on lowering the cost of living for customers. eCommerce also contributed to sales revenue growth, particularly in the first half during the lockdowns in NSW, Victoria and the ACT.
During the year, Coles Online increased its network coverage with 95% of Australians now having access to home delivery and Click & Collect expanding to reach more than 740 stores. With a focus on immediacy, Click & Collect Rapid was expanded to more than 450 stores and same day home delivery expanded to more than 520 stores.
Liquor benefits from RTDs & spirits
Liquor sales revenue was $3.6 billion for the year, an increase of 2.5% on the prior corresponding period and 18.0% on a three-year basis while comparable sales grew by 2.1%. The Christmas and Easter trading periods were strong. Liquorland was the strongest performing banner with 191 Black and White Liquorland renewals completed, providing customers with an enhanced range of local wines, craft beers and boutique spirits. At a category level, Ready-To-Drink and Spirits were the key drivers of growth.
Support in challenging times
Mr Cain acknowledged the hard work of Coles’ team members, suppliers, and community partners in overcoming significant supply chain challenges, and also commented on the ongoing pressures facing households.
“With Australian families facing increased pressure on household budgets, our commitment to delivering trusted value remains more important than ever. As examples, we are beginning to see our customers buying significantly more $1 Coles pasta and our $1 coffee at Coles Express has never been more popular,” he said.
“The ongoing headwind of rising cost inflation further underscores the importance of our Smarter Selling program. The commissioning commencement of three of our four automated distribution centres and online customer fulfilment centres in 2023 will also allow us to drive future efficiencies while delivering an enhanced offer to inspire customers.”
