Prolonged supermarket price wars and changing economic situations have put handbrake on Coles’ market growth. Food and alcohol sales rose 2.9 percent to $7.85 billion in the principal quarter of the 2017 financial year, down from 3.5 percent in the preceding quarter. Experts had generally anticipated that Coles would show abating sales growth as Woolworths’ turnaround plans are getting successful. Coles food and alcohol sales increased 1.8 percent on the earlier comparing period.
During the first quarter the Australian supermarket giant opened four supermarkets while closing three. The retailer has 788 stores in total in Australia. Nine were refurbished in the current quarter, with more than 50 planned for the year. Sales at Coles Express were also down 13.7 per cent on the previous quarter to $1.5 billion, driven by lower fuel volumes and fuel prices.
Coles has guaranteed to keep reducing price as the war with rivial retail chains Woolworths and Aldi escalates. The market giant guaranteed clients they will keep up their dedication to lower costs regardless of their sales growth dropping to its most minimal level since 2009, reported The Age newspaper.
As a major aspect of their methodology to cut cost on a long haul premise, Coles has as of late cut private label costs and enhanced their Every Day Value program by including more items. ‘What we’re not going to do is deal with short-term market concerns by compromising on what we want to do long term,’ Wesfarmers boss Richard Goyder said.
In the September quarter sales growth split to 1.8 percent contrasted with the 3.6 percent growth rate for the primary quarter of 2017. Be that as it may, shareholders responded to the sales as shares dropped just about 6 percent to $41.45. Mr Goyder conceded the market is exceptionally aggressive yet fortified they will probably pass on more prominent efficiency to their clients. ‘We’ve expected for some time now that Woolworths would increase competitive intensity, Aldi is already very competitive and the independents are fighting very hard as well,’ he said.