Coles Reveals FY23 Results

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By June Ramli

Sydney, Aug 22: Coles Group (COL.AX), a prominent Australian supermarket chain, has projected modest supermarket sales for the early stages of fiscal year 2024 while announcing a noteworthy 4.8 per cent increase in its full-year profit.
Headquartered in Melbourne, the company has noted a cautiously positive trend in supermarket volumes for fiscal 2024 compared to the same period last year.
Early signs suggest a shift in consumer behavior, with more individuals favoring home dining over out-of-home options.Coles Group anticipates that the cost-of-living pressures experienced by Australian households will persist throughout fiscal 2024.
The company reported a net profit after tax of A$1.10 billion ($705.54 million) for the year ending June 30, slightly below Refinitiv’s estimate of A$1.11 billion, yet surpassing the A$1.05 billion recorded the previous year.The increase in profit can be attributed to heightened supermarket sales, which helped counterbalance flat liquor sales revenue for the year. Notably, Coles’ supermarket division, responsible for the majority of its revenue, achieved a remarkable 6.1 per cent growth in revenue, reaching A$36.746 million for the year.
Total supermarket inflation for the year was notably higher at 6.7 per cent compared to the previous year’s 1.7 per cent.
This increase in inflation has enabled supermarket chains, including Coles, to pass on elevated shelf prices to consumers, driven by significant inflation levels and increased borrowing costs.
Consequently, more individuals are choosing to prepare meals at home and reduce discretionary spending.
Despite facing challenges stemming from COVID-19-related on-premise closures and restrictions in the first half of the year, Coles’ liquor sales revenue remained steady throughout the year.
The second half saw a return to growth, achieving a 2.7 per cent increase.Furthermore, Coles Group recently unveiled its fiscal year 2023 full-year results during a comprehensive conference call.
The company’s CEO, Leah Weckert, provided valuable insights into the evolving landscape of consumer preferences and the role of Customer Fulfilment Centres (CFCs).
Weckert addressed concerns regarding the potential obsolescence of CFCs due to the increasing demand for faster deliveries.
She clarified that CFCs are just one component of the comprehensive network strategy, representing around $1.5 billion of total business sales within the context of a $40 billion business.
Coles Group plans to continue utilizing physical stores for immediate services, Click and Collect, and next-day home delivery, alongside CFCs.The upcoming Melbourne CFC, set to open in 2025, was discussed in the context of enhancing customer satisfaction and operational efficiency.
Weckert highlighted the positive impact of CFCs, including reduced congestion in busy stores, enhanced shopping experiences, and improved next-day home deliveries.
Additionally, CFCs allow for a broader range of products, including fresh produce and meat, meeting the growing demand for immediacy.Weckert also addressed the use of platforms like UberEats and DoorDash for Coles product delivery, addressing concerns about conflicts with store staff.
She confirmed the continued utilization of these platforms to enhance immediacy and noted their positive growth.
The conference covered various topics, including recent sales volumes, supply chain stability, inflation, and cost-saving measures.
Weckert reiterated Coles Group’s commitment to delivering value to all customers, with a specific focus on addressing the needs of younger families and customers under 34.

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