Coles is ramping up its convenience strategy, with a plan to grow sales on the back of “food-for-now” and “food-for-later” products, according to a report in the Australian Financial Review.
As part of this strategy, the brand will convert around 200 Coles supermarkets to a more premium, convenience-focused format, as shift 200 lower-volume stores to a more value-centric format, while adding around 75 new product lines to its existing range for ready-to-eat meals – such as breakfast foods, curries, soups, roast vegetables and stir-fry kits.
According to the report, Coles chief executive Stephen Cain sees an opportunity through this strategy to grow another billion dollars in sales over the next five years.
“It’s high growth and it mainly happens outside supermarkets at the moment,” Cain told the AFR.
“Some of it will come from other players in the convenience market, but because it’s value-added it’s also growing the market as well.”
Cain previously told analysts that the brand was changing rapidly in the space, but was still lagging behind the competition.
“We are growing our baskets, and we are growing our transactions. We believe that we can do a better job with the convenience customers, and we’re setting up the business to do that going forward,” Cain said.
Coles’ focus on convenience is not surprising, given the number of partnerships it has forged with third parties, since splitting from former-parent company Wesfarmers in late 2018, to ensure customers can get its products how they want, when they want.
Deals with online marketplace eBay and meal-delivery service Uber Eats are another incentive for Coles to improve its food-for-now and food-for-later offerings by allowing several pillars of the business to utilise the expanded range.
“Making life easier for our customers means enabling our customers to fulfil their shopping needs ‘anytime, anywhere’,” a Coles spokesperson told Inside FMCG.
“We know our customers’ needs are changing rapidly and we are evolving our offer accordingly.”
The convenience market is growing rapidly in Asia Pacific, with the region having been named the “largest and fastest-growing” convenience market in the world in a report by GlobalData.
According to GlobalData retail analyst Honor Strachen, the changes being seen in the region’s convenience offers, such as those outlined by Coles, have been improving store sales and profitability at a time that retail space is becoming more expensive, and margins are increasingly under pressure from inflation and discounting.