Coles reveals multimillion-dollar boost from rival’s strike
Source: AAP
Coles quickly moved to take advantage of the damaging pre-Christmas at rival Woolworths – estimating it got $120 million in additional sales and $20 million in earnings as a result.
Coles said on Thursday that after the industrial action at Woolworths’ warehouses was announced in late November, it worked with suppliers to increase the delivery of products to stores in Victoria and NSW.
It also added more staff.
Woolworths revealed on Wednesday that its own supermarket sales in Victoria hadn’t yet recovered from the17-day strike, which ended in December. The ongoing effect suggests some shoppers have switched their loyalty to Coles.
Woolworths, which is Australia’s biggest supermarket chain said on Wednesday, it made $739 million in net profit after tax in the six months to December 31. That was down 20.6 per cent from 2024, with the company saying the strike in the southern states cost it $95 million in lost earnings.
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On Thursday, Coles said new state-of-the-art automated distribution centres in Kemps Creek, NSW, and Redbank, Queensland, showed their value during the strike at Woolworths warehouses in NSW and Victoria.
Those investments in modernising the company’s supply chain meant profit slipped slightly in the first half. But sales were up and Coles will pay a higher dividend.
The big retailer made a $576 million profit in the 27 weeks to January 5. That was down 2.2 per cent on a year ago, as it spent $92 million on dual-running costs during the warehouse transition, up from $46 million last year.
Coles’ underlying profit, which excludes those expenses, was up 6.4 per cent to $666 million.
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Group sales were up 3.7 per cent to $23 billion, with supermarket sales up 4.3 per cent to $20.6 billion and sales from its Liquorland up 0.8 per cent to $2 billion.
“We had a strong focus on value, fresh quality and availability, which has supported volume-led growth in supermarkets during the half,” group CEO Leah Weckert said.
In August, Coles opened its second automated distribution centre in Kemps Creek, NSW – about 40 kilometres west of Sydney’s CBD. The mammoth site is about the size of 25 rugby league fields.
It is performing well and Coles has plans to build its third automated distribution centre, this time in Truganina, 22 kilometres west of Melbourne’s CBD.
The $880 million facility will have 15 per cent more capacity than its existing automated warehouses in Kemps Creek and Redbank, Queensland, and will deliver full automation of Coles’ room-temperature distribution network across eastern Australia.
The project will begin this year and take up to five years to complete, Coles said.
It said that in the first seven weeks of the second half, supermarket sales were up 3.4 per cent and liquor revenue up 3.8 per cent.
Coles will pay an interim dividend of 37 cents per share, up 2.8 per cent from a year ago.
