Coles relaunches Every Day Price program as profit forecast falls short
Coles announced a relaunch of its Every Day Price initiative and an expanded Exclusive range, while reporting an 11% share drop after missing profit expectations.
Coles shares opened lower on Friday, falling 11% to $20.88 after the company reported a profit miss. The retailer said it is relaunching its Every Day Price program and expanding the Exclusive to Coles range ahead of the holiday season to support shoppers who remain value-conscious. Under the program, the price of eligible items is locked for at least six months from the date they are added.
"While supermarket sales growth remained in line with the prior quarter, we know household budgets are under pressure and customers are shopping more deliberately across retailers and channels," CEO Leah Weckert said.
"There is more to do to ensure we are front of mind for customers in this environment, and we are taking action to sharpen our offer over the coming months," she added.
The company said sales stayed resilient but growth moderated in the first four weeks of the new quarter compared with the first three months of the financial year. It also noted that geopolitical uncertainty, including the conflict in Iran, has increased fuel costs and is affecting margins. Coles expects first-half earnings before interest and taxes of $1.23 billion.
Quarterly sales rose 2.2% to $11.2 billion, driven mainly by supermarket revenue, which increased 3.6% to $10.32 billion. The market had anticipated a 3.0% rise. Liquor sales fell 1.3% to $831 million. Rival Woolworths issued a similar statement about cost-of-living pressures affecting customers ahead of Christmas.