A year after Coles’ result was chiefly a story of supermarket-led sales growth, FY26 has more ballast.
The grocer converted modest topline growth into much stronger underlying earnings, gained supermarket market share and pushed e-commerce deeper into the business, while liquor remained its conspicuous weak spot.
Coles Group sales revenue climbed 2.8 per cent to $45.58 billion. The group also reported a $1.09 billion full-year profit after setting aside $235 million to cover costs following a Federal Court judgment in a major staff underpayment case. Excluding those costs and other significant items, underlying profit rose 13.7 per cent to $1.26 billion.
Most of the momentum, again, came from supermarkets. Sales increased 3.7 per cent to $41.47 billion, while EBIT (Earnings Before Interest and Taxes) advanced 12.2 per cent to $2.37 billion, and the division gained market share.
CEO Leah Weckert addressed whether cost-of-living pressure was influencing more consumers to prepare meals at home, noting the behaviour was continuing.
“Customers are still very focused on value, and more than half our customers are telling us they’re having more meals at home. So that is definitely supporting a reasonable market growth in the grocery segment at the moment,” she said.
That thrift is also changing what lands in the trolley, with Weckert saying shoppers were choosing Coles own brands and specials and drawing on loyalty offers to keep household budgets modest.
Online grocery gave another source of momentum with supermarket e-commerce sales rising 26.4 per cent to $5.6 billion, while Coles’ customer fulfilment centres became earnings-positive in their second year of operation.
In liquor, sales fell 3.3 per cent to $3.55 billion, and EBIT fell 47.8 per cent to $59 million, prompting a multi-year program spanning more supermarket co-locations, store closures and a more integrated food-and-drink offer.
“We expect this plan will strengthen the customer proposition and improve financial performance,” Weckert said.
Uptick in theft
On Monday, ABC’s 7.30 aired four months of CCTV footage showing Coles workers being abused and assaulted in Victoria, where the retailer says threatening incidents have surged as high as 85 per cent over the past two years. Weckert said the company has examined facial recognition technology, but has yet to plan any firm rollout.
“We certainly have heard going into the end of the financial year that there’s been a slight uptick in theft and threatening situations in stores across the retail industry,” she said.
Accenture partnership
Coles’ recently expanded partnership with Accenture, announced in early August, will establish a new Coles Capability Centre and give the retailer access to specialist technology capabilities at greater scale. Coles expects to spend about $190 million on the program in FY27, including redundancy and transition costs.
Weckert said the changes would affect the corporate workforce and leave store and customer-facing teams untouched.
“We expect that it will impact … hundreds of jobs in the next financial year (in) our corporate workforce,” she said, adding that Coles will deploy as many team members as possible through reskilling and pathways into other roles.
Coles is concurrently increasing its investment, with an additional $300 million earmarked over FY27 and FY28 for technology, renewals and about 45 new supermarkets.
