Coles Quarterly Sales Falter
29 April 2019 - 9:22AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Coles Ltd. (COL.AU) logged a dip in
quarterly sales, dented by the shift to a new business arrangement
with its retail-fuel supplier that offset steady growth in its core
supermarkets and liquor businesses.
Sales totaled 8.88 billion Australian dollars (US$6.25 billion)
in the 12 weeks through March 24, down 1.8% on sales of A$9.05
billion a year earlier. That was despite a 3.2% rise in
supermarkets sales to A$7.27 billion and 4.3% growth in liquor
sales to A$735 million.
Sales from Coles's "Express" division slumped 32% year-over-year
to A$874 million.
Effective in March, Coles moved to a commission-agent model and
fuel supplier Viva Energy Group (VEA.AU) took responsibility for
setting the retail price of gasoline sold through the Coles chain.
The retailer will no longer record fuel sales revenue in its
quarterly updates.
Fuel volumes dropped 11% in the fiscal third quarter.
Coles, Australia's second-largest supermarket chain by market
share behind Woolworths Ltd. (WOW.AU), was spun off late last year
by conglomerate Wesfarmers Ltd. (WES.AU), becoming an independent
company as competition in the supermarket industry continues to
heat up with a push by the likes of German discount chain Aldi.
Late last month, Coles entered a technology partnership with the
U.K.'s Ocado Group PLC (OCDO.LN) to develop the Australian
retailer's online grocery business. The push is forecast by Coles
to roughly double its current Australia-wide home-delivery capacity
and boost its online profit margin.
On a comparable basis, Coles said its supermarkets sales were up
2.4% on-year, helped by a promotional campaign and the timing of
New Year's Eve, a typically strong trading day that fell in the
third quarter this fiscal year.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
April 28, 2019 19:07 ET (23:07 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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