A report in The Age newspaper has suggested that Coles Group’s supermarket division is performing below the retailer’s expectations.
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Having recorded sales below budget leading into the all-important Christmas period, the retailer has announced a new fuel discount offer to boost sales.
The Age said trading figures it obtained from sources within Coles show that supermarket sales, including Bi-Lo stores, were AUD$36m (US$28.5m) for the month to the end of November, almost 3% below budget, while December has also started badly. The newspaper added that lack of growth in food and drink had been a concern for investors, and that Coles is lagging behind competitors such as Metcash and Woolworths.
Although the retailer recently revealed that first-quarter sales had risen by 3.3%, this excluded the 180 Bi-Lo supermarkets, which are currently being converted to the Coles format. The decision to exclude Bi-Lo from the comparison was criticised.
In October, Coles rejected a leveraged buyout from a consortium led by Kohlberg Kravis Roberts & Co (KKR).
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