Coles sales jump 13 per cent after coronavirus panic buying
Supermarket giant Coles has reported a massive 13 per cent upswing in sales over the first three months of the year as coronavirus panic buying saw people rush into its stores.
The $21 billion retailer told investors on Wednesday total revenue in its supermarkets division jumped to $8.2 billion in the third quarter of its financial year, a 13.8 per cent increase on the March quarter last year. Comparable sales grew 13.1 per cent, in line with analyst predictions but a more than 550 per cent increase on the 2 per cent same-store sales growth the supermarket reported at its half-year result.
Australians rushed into supermarkets to hoard supplies in the coronavirus crisis.Credit:AAP/James Gourley
Chief executive Steven Cain said it was the strongest sales growth in Coles' history, nearly 5 per cent more than the next highest figure of a 7.3 per cent rise in the fourth quarter of the 2009 financial year. This was driven almost entirely by sales through March, he said.
"The actual surge started in very late February, [but] March was far and away the biggest month," he said.
However, despite analyst predictions of heightened growth persisting throughout the fourth quarter and even into the 2021 financial year, Mr Cain said that had "not been the case" throughout April, with sales growth trending back down to the 3.6 per cent mark seen earlier in the year.
This was partially affected by subdued Anzac Day and Easter celebrations as families didn't hold their typical gatherings due to social distancing restrictions, he said.
"We won't know until the next few weeks as to whether things are going to remain elevated or whether they will go back to pre-COVID levels," he said.
Coles also flagged its costs would be higher over the June half, due to an increase in wages for additional workers, more investment in store cleaning and the supermarket chain facing some of the costs of higher produce brought on by the bushfires and drought.
Earnings could also be damaged by lower margins across liquor and food, it warned. While a spike in unemployment will likely fuel sales of Coles' higher-margin own-brand products, the company flagged it would also look to put more items on promotion to create better deals for customers.
Elsewhere in the business, liquor sales also skyrocketed, up 7.2 per cent to $740 million despite being subdued slightly by the residual effects of the summer bushfires and floods.
Coles chief executive Steven Cain reported a bumper sales result.Credit:Luis Enrique Ascui
The boom wasn't as pronounced in Coles' petrol station convenience stores, with same-store sales growing 4.3 per cent as fuel volumes declined late in the quarter. Fuel revenues have continued to "materially decline" in April, though the retailer said it expects them to pick back up as the country is reopened.
Online sales growth also slowed from 24 per cent in the first half of the financial year to 14 per cent throughout the third quarter as Coles was forced to shut down online deliveries after a huge spike in demand.
However, Mr Cain said he expects demand for online orders to pick up again and persist past the coronavirus crisis, saying the supermarket was in a "great position" to benefit given its partnerships with logistics partners such as Ocado.