Coles has profited from elevated grocery activity due to COVID with the supermarket giant reporting a 10.5 per cent group sales revenue to $9.6 billion throughout the first quarter of FY21. In Victoria, Coles online sales doubled during its Stage 4 lockdown.
Comparable sales growth in Coles’ supermarkets sector hit 9.7 per cent and online sales growth of 57 per cent. Liquor online sales almost doubled with a growth of 80 per cent during quarter 1 of FY21.
In the first quarter Supermarkets comparable sales growth was driven by Victoria, and to a lesser extent New South Wales, as Stage 3 and subsequently Stage 4 restrictions were introduced.
Online supermarket B2C sales grew by 73 per cent. Coles credited the enhancements to user experience in online shopping including implementation of single-click checkout and additional website functionality allowing greater personalisation.
In Victoria, Online sales grew by more than 100 per cent as restrictions were reimposed in response to the second wave.
“While Online customer experience was impacted early in the quarter due to additional customer demand in store, rapid strategic investments in capacity were made through extended operating hours, additional drivers and delivery vans, additional Home Delivery stores and Click & Collect concierge parking,” Coles said in its FY21 update.
“We have made further progress executing our strategy to ensure the long-term growth of Coles, particularly in digital and online,” Coles Group CEO, Steven Cain said.
“This is despite significant COVID related restrictions in Victoria related to our main Store Support Centre, our distribution centres, our meat suppliers and of course, our customers – many of whom were not able to visit their regular Coles store due to the restriction on not travelling more than 5 kilometres from home or permitted workplaces.”
As customers continued to focus on home cooking and hygiene, key growth categories included baking mixes, herbs and spices and flour, cleaning goods and dishwashing, all growing by around 30 per cent. Conversely, categories most negatively impacted by COVID were infant formula, facial tissues and beauty, all experiencing double-digit declines.
In its outlook ahead, Coles reported Witron automated distribution centre build in Queensland progressed with automation technology starting to be installed in Q2 while the remaining approvals for the New South Wales site expected to be finalised in Q2.
Construction on the Ocado online customer fulfilment centre in Melbourne progressed in Q1 and development approvals in place for the Sydney online customer fulfilment centre with construction commencing in Q2.
“As we enter a new COVID normal, Coles will continue to prioritise the health and safety of our customers and team members throughout our store network and supply chain,” Coles Group CEO said.
“We have been proud to serve as an essential needs business during this, the greatest test of our lifetime, and look forward to proudly serving and contributing as Australia begins its recovery and growth phase.”