Supermarket giants reveal revenue following nation’s panic buying

Consumer panic buying in March due to the current pandemic saw a supermarket giant record its highest-ever quarterly sales growth, whilst another says strict purchasing limits hurt its sales.

Coles said total supermarket sales revenue for the third quarter rose to $8.23 billion, up 13.8 per cent on the same time last year due to Australian shoppies stockpiling on household goods and perishables.

However, Australia’s leading supermarket Woolworths, was outpaced by Coles for just the second time since 2016.

Woolworths food comparable sales grew 10.3 per cent for the third-quarter sales,  below analyst estimates of 11.8 per cent growth and 3.5 per cent behind Coles’ sales.

Overall revenue for all of Woolworths’ divisions in the three months to the end of March was $16.4 billion, up 10.7 per cent when compared to the same quarter last year, and higher than the 6 per cent sales increase reported at its half-year result.

Brad Banducci, Woolworths chief executive told The Age that decision to put a two per customer, per transaction limit on nearly every in-store item was “crude” but essential, though noted it may have affected sales.

Due to additional spending on wages for 22,000 new staff, more online and warehouse capability, and security and cleaning costs, Woolworths has informed investors of a $220 million to $275 million cost blowout.

At Coles, March was an “extraordinary sales spike”.

The company reported second-quarter sales growth of 3.6 per cent across Coles’ supermarket network following the Christmas period at the end of 2019, noting this third quarter as record sales growth.

Steve Cain, Coles chief executive, said he was unsure if this trend reflected people tightening their spending or simply trying to buy in bulk because of supply pressures.

Coles Online sales revenue grew by 14 per cent in the third quarter, despite Home Delivery and Click and Collect being temporarily suspended in March prior to the launch of Coles Online Priority Service.
Steve short term supply issues for items such as flour and toilet paper would most likely continue as demand remains elevated.
He told 9news that it could be weeks or months before stores are fully restocked with products such as disinfectant wipes and hand sanitisers, though they are still currently available.

Like its main grocery sector competitor, Woolworths, Steve expects higher costs in quarter four as a result of the company’s extra COVID-19 investments.

Three Coles pop-up distribution centres were opened in New South Wales, Victoria and Queensland as capacity increased and put on an additional 12,000 team members to ensure improved stock replenishment during COVID.

Both Coles and Woolworths have seen sales return to normal levels of mid-single digits in April.

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