Coles CEO Leah Weckert has indicated that prices could soon come down thanks to investors in other areas of the company. (Source: AAP/Getty)
Coles shoppers could soon see prices fall as the supermarket war with Woolworths and Aldi heats up. The second-biggest supermarket revealed on Tuesday that its profit for 2024-25 was $1.08 billion.
CEO Leah Weckart said this huge result was thanks to investments in new distribution centres, back-of-house changes, its higher-margin own-brand range, and its successful advertising business. In an earnings call, she signalled these wins could end up affecting shelf prices in the future.
“We are going to continue to ensure the offer is sharp and are going to continue to invest to keep that top-line momentum going,” Weckert said.
“Those types of initiatives definitely have given us the flexibility over time to be able to invest back into the customer offer.
“We’ve also put a lot more products onto every day, low price through the course of the year, we’ve made improvements in the Flybuys program and the personalisation. We’re also seeing sales growing through online.”
Coles and Woolworths lower their prices on hundreds of items every season due to their popularity in those three months.
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But Coles’ indication of a broader price drop could put Woolworths under intense pressure to follow suit in order to stay in the race.
Woolworths is set to reveal its 2024-25 earnings on Wednesday.
Earlier this week, Aldi turned up the heat in the supermarket wars by announcing 250 items would be hitting the shelves in the coming days.
Considering Aldi stocks around 1,800 compared to Coles and Woolworths’ 20,000 to 25,000, it’s a big step up.
The German retailer hoped it would fill shoppers’ baskets better and stop them from having to visit multiple stores.
Coles’ $1.08 billion profit was a 2.3 per cent lift from last year’s results.
However, it was still below market expectations of $1.11 billion in profits.
Coles raked in $39.98 billion worth of supermarket sales and $3.67 billion worth of alcohol sales.
It said this was a combination of bigger basket sizes and the value of transactions, as well as a “focus on value, quality, availability and the overall customer experience”.
Coles’ Simplify and Save to Invest program, which is the company’s internal cost-efficiency initiative, managed to save a whopping $327 million.
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Coles made nearly $40 billion worth of sales in the 2024-25 year. (Source: Getty) · SOPA Images via Getty Images
It’s aiming to save $1 billion through this program alone over four years.
Coles was also able to renew 60 supermarket location contracts and opened eight new stores throughout the financial year.
In the liquor department, it was able to complete 118 renewals and open 16 new stores.
However, the closure and site reconfiguration of the Truganina Victoria location cost Coles $35 million.
The brand’s profits would have been a 5.7 per cent jump instead of 2.3 per cent had there not been a slump in tobacco sales.
As Coles, Woolies, Aldi, IGA and others all compete for shoppers’ attention, Finder has revealed which brand has been most successful in the last 12 months.
Aldi won the ‘Top Value’ award for the second year running, while Harris Farm produced a surprising result.
“Harris Farm took the top gong in half of all the categories this year, and was the most recommended supermarket in Australia,” Finder’s head of consumer research Graham Cooke said.
“For those looking for a bargain though, Aldi came out on top again. Their range, however, is smaller than their competitors.
“Coles has been upping their game in delivery, and the Woolies rewards program is the highest-rated in Australia, and the only one which awards Qantas points.
“The supermarket industry is fiercely competitive and brands do tend to excel in different areas.”
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