Coles has announced it will cut 450 staff from its Melbourne head office.
The management shake-up is part of a three-year program to cut costs and create funds for investment in online and convenience.
Managing director Steven Cain (below) told staff the news on Thursday morning, ahead of what he described a “strategic reset” to be revealed at a strategy update on June 18.
The redundancies represent about 10% of the group’s 4000 head office staff, although Cain said many of the roles to be made redundant are vacant.
Two senior senior executives will also leave: Alister Jordan, CEO of Coles Express, Coles Online and corporate affairs, and Coles’ chief store operations officer, Paul Bradshaw, will also depart by the end of the calendar year, despite being offered other senior roles.
They follow Alex Freudmann, who was appointed managing director of Woolworths’ Dan Murphy’s liquor chain last month.
Coles’ chief operating officer, Greg Davis, has been appointed CEO commercial and will take over the running of the petrol and convenience business; while Coles chief supply chain officer Matthew Swindells has been appointed chief operations officer and will oversee supply chain and store operations.
The company has also poached Metcash’s “transformation director” Ian Bowring to head up its “smarter selling” unit.
Coles Liquor reported Q3 sales increase
The move follows Coles Liquor announcing in April that its sales revenue for the third quarter was $735 million, up 4.3% on the prior corresponding period.
According to the company, sales performance was driven by both improvements in average basket size and transaction numbers, with the Spirits category the strongest performer in the quarter.
Cain noted that the food and liquor retailer faced challenges, including costs rising faster than sales and margin dilution from the shift to online shopping.
Coles Online experienced growth of 27%, with sales of over $1 billion on a rolling 12-month basis.
However, trading conditions for Liquorland were impacted by a subdued market and lower promotional intensity in beer, particularly in January. Exclusive Liquor Brand (ELB) growth continued to be strong in the wine category, lifting ELB penetration and Liquorland’s market share in the wine category.
Coles added: “Trading conditions for Vintage Cellars remained challenging during the period, largely driven by softer growth in the wine category and two store closures.”