Coles Group’s latest sales results reveal a total revenue of $786 million over the third quarter of 2024, 1.9% down on the prior year. This decrease is accentuated when focusing on comparable growth, which dropped 3.1% over the period.
Leah Weckert, CEO of Coles Group, said that these results are reflective of current difficult trading conditions in which cost of living pressures are forcing consumers to cut back on discretionary spending.
“We’re seeing people trading into low-cost alternatives, so, for example, out of champagne into things like prosecco or Australian sparkling,” she said.
“People are moving back into beer because this tends to be a category where there are cheaper alternatives.”
According to statistics provided by Coles Group, 30% of shoppers reduced their spending on alcohol over the quarter, impacting Coles Liquor’s network of 964 liquor retail outlets significantly.
In spite of the decrease, Coles Liquor’s renewed focus on developing its omnichannel presence, as outlined at a recent Drinks Association Network Breakfast, appears to have been making notable progress, with e-commerce sales up 4.1% to a worth of $44 million. This includes a penetration of 5.7%, up from 5.4% in 3Q23.
“We have also seen a meaningful increase in customers interacting with our digital platforms and loyalty programs which is allowing us to engage on a more personalised basis with these customers,” said Weckert.
The online sales growth has helped Coles Liquor move away from less profitable bulk sales and adjust its promotional mix, including the addition of 39 new Exclusive Liquor Brand lines during the quarter.
Sales of international spirits brands suffered most throughout the quarter, with customers trading down to alternative formats such as RTDs.
“What we are seeing is that RTDs are now continuing to grow because customers are trading out of those full bottle of spirits into more affordable options, like RTDs,” said Weckert.
During the quarter, Coles Liquor retail both opened and closed three stores across its Liquorland, Vintage Cellars, and First Choice banners, keeping the total count at 964. This will increase soon following the recent acquisition of 20 9/11 liquor stores in Tasmania from Federal Group.
The 9/11 purchase will significantly increase the Tasmanian footprint of Coles Liquor, which currently only has three stores in the state. Once launched, approximately 30% of Tasmania’s population will be within a five-minute drive of a Coles Liquor store.
“’Our decision to purchase twenty 9/11 stores demonstrates the confidence we have in this state and supports our vision to be a simpler, more accessible and locally relevant drinks specialist,” said Coles Liquor Chief Executive Michael Courtney at the time.
