Coles is teaming up with British supermarket Sainsbury’s as part of a three-year deal to expand Coles’ private label range.
The strategic sourcing partnership will give Coles access to Sainsbury’s supply chain allowing the Australian retailer access to a plethora of new products for its own brand range, the first of which will hit Coles store in the second half of FY20.
Coles’ private label products account for 30 per cent of supermarket sales with the retailer planning to increase that to 40 per cent of total sales over the coming years.
“We want to accelerate the introduction of innovative products to Coles Own Brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia,” Coles chief executive – commercial and express Greg Davis said.
In FY19, the retailer added a further 1200 products to its own brand range, and reported that sales are growing at twice the rate of any other products.
Health has been a key focus in the private expansion with the introduction of the ‘I’m Free From’ range for customers with food intolerances, as well as vegan and vegetarian meal options from Nature’s Kitchen and Herb & Sons.
The retailer also introduced Wellness Road in May of this year to make healthier eating more accessible and affordable, with 28 products including organic foods, seeds, flour, grains, noodles and oil.
Michael Luck, director of business development at Sainsbury’s said the new partnership will bring more choice and innovation to Australian customers.
“Great quality food has been at the heart of our business for 150 years and we’re excited to bring Sainsbury’s fantastic products to Australia, offering Coles customers a range of high quality, innovative products that they won’t be able to find anywhere else,” he said.
Coles is also planning to support Australian food and liquor suppliers to sell their products to Sainsbury’s, providing opportunities for Australian businesses to expand internationally.
“Coles has been exporting Australian food for 20 years, selling Australian-grown meat, wine and other products across the Asian market – this partnership with Sainsbury’s has the potential for us to take even more Aussie food to international customers,” Davis said.
Currently, the majority of Coles’ private label range is manufactured or grown in Australia, and the retailer said that the Sainsbury’s partnership will not change this.
“This deal will free up resources for our own product development team so that they can drive further innovation and help us fulfil our strategy to make Coles an Own Brand Powerhouse,” Davis said.