Coles records staggering $1.1billion profit – and the single customer trend that has pushed sales through the roof

Profits at Coles have grown by 8 per cent to $1.1bn.

The supermarket giant announced its annual financial results on Tuesday morning, showing revenue followed the same upward trajectory, increasing 4.4 per cent for the year to $43.6bn.

Total dividends to shareholders increased from 66 cents per share to $0.68.

The results encompass the Coles Group stable, including the Coles and Coles Local stores, Liquorland, First Choice Liquor Market and Vintage Cellars.

‘There have been a number of challenges throughout the year, including changing customer behaviour, increased external scrutiny and cost inflation,’ chief executive Leah Weckert said.

She added household financial pressure was ‘front of mind’.

Australians struggling with the cost-of-living crisis and opting for home cooked meals rather than nights out have been credited for the stronger than expected sales and earnings. 

‘We continue to see signs of customers shifting from out of home dining, with our Coles Finest range and convenience meals remaining higher growth categories,’ Ms Weckert said. 

Coles has reported a 30 per cent jump in e-commerce sales as the supermarket giant rolls out changes to its app and website to improve and personalise customer experiences.

The supermarket announced it had $3.7 billion in e-commerce supermarket sales in the 53 weeks to June 30, up from $2.8b in 2022/23. 

Online sales made up 9.4 per cent of all sales, up from 7.5 per cent the year before.

The company said it worked to significantly reduce Click and Collect wait times and added several other new digital features in 2023/24.

Overall, Coles had $39b in annual sales, up 6.2 per cent from the slightly shorter previous financial year, or a rise of 4.3 per cent on a normalised 52-week basis.

It comes after the supermarket announced in February that its sales were up, but its profits were down. 

Coles’ sales revenue was up 6.8 per cent to $22.2 billion in the 27 weeks to December 31, but its profit fell 3.6 per cent to $616 million, compared to the same period a year ago. 

Australians struggling with the cost-of-living crisis and opting for home cooked meals rather than nights out have been credited for the stronger than expected sales and earnings (stock image)

The culprit was mostly higher lease costs and higher interest rates: both were roughly equal contributors to Coles’ financing costs rising by $26 million to $213 million. 

Just like households that are paying higher interest rates on their mortgages, we are paying higher levels of interest on the debt that we pay to operate the business,’ Ms Weckert said at the time. 

Supermarket prices increased three per cent in the second quarter of 2023/24, compared to a 3.1 per cent rise in the first quarter. Prices excluding tobacco and fresh produce rose four per cent, down from 5.7 per cent. 

Ms Weckert said a number of changes had reduced store thefts, which had been an issue coming out of the pandemic.

The measures include better training, security at its entrances and exits and technological solutions, she added.