Australian grocery retailer Coles has enjoyed faster sales growth than rival Woolworths Ltd for the 2011 financial year.
The country’s second-largest retailer reported a 6.7% rise in sales A$31.7bn (US$23bn) for the year ended 26 June. Last week, Woolworths recorded a 4.3% increase in full-year sales in its Australian supermarkets to A$36.2bn.
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Coles said its food and liquor division reported 6.3% growth to A$23bn, while its convenience stores saw sales rise 8.5% to A$6.7bn. Comparable-store sales in the food and liquor division were up 6.3% for the year.
For the fourth quarter, Coles’ sales were up 7.2% to A$7.9bn. Sales from the food and liquor division rose 5.3% to A$6.1bn, while convenience sales were up 14% to A$1.8bn. Its food and liquor division reported comparable-store sales growth of 5.2% for the fourth quarter.
Coles managing director Ian McLeod said he was “encouraged” by the underlying comparable sales growth, which was “achieved through increased supermarket transactions and bigger basket spend”.
“Our customers have responded positively to our Down Down campaign to reduce shelf prices on the products they buy most against a backdrop of rising costs of living that has adversely affected consumer sentiment and industry sales,” said McLeod.
“Coles has worked hard to reduce the total cost of the weekly shopping basket by cutting prices of staple grocery items, such as milk and bread, to offset the impact of floods on prices of fresh produce, including bananas and field tomatoes.”
Coles’ owner, Wesfarmers, which also owns a number of general merchandise, electronics and DIY banners, described the consolidated result as “solid”, especially given the “backdrop of declining consumer confidence, significant price deflation and adverse weather conditions experienced during the period”.
“As households have experienced higher costs of living and an increased propensity to save, all of the group’s retail businesses have worked hard to provide genuinely better value and an improved customer offer,” said Wesfarmers managing director Richard Goyder.
Shares in Wesfarmers were down 2.4% at the close of the Australian Stock Exchange to A$29.40 a share.
