Coles released half-year financial results on Friday. Photo: NewsWire / Gaye Gerard
Coles will use AI to target sales at specific demographics following the supermarket being sued by the consumer watchdog over allegedly fake discounts.
Coles executives discussed the company’s use of AI sales ideas during a conference call with analysts on Friday, following the release of half-year financial results.
Coles has recorded a $511m profit for the second half of 2025, down 11.3 per cent.
This week, the Federal Court heard closing arguments in a case brought by the consumer watchdog over Coles’ “Down Down” sales prices.
Asked on Friday how the brand would rebuild trust with consumers following the lawsuit, and what colour price stickers shoppers would see on the shelves – denoting different sale campaigns – chief commercial officer Anna Croft said AI would drive Coles’ sales regime.
Coles chief executive Leah Weckert says the grocery and liquor industries are highly competitive. Picture: Martin Keep / NewsWire
“Some categories we’ve had to move onto (the everyday low prices campaign) … we’ve been doing fewer, bigger bolder promotions,” Ms Croft said.
“We’re just really focused on actually using data and AI on ‘how do we get the right promotions to meet the right customer cohorts’.
“It comes back to making sure we’re doing the right thing across the basket, not in any particular category, but lowering the cost of shopping and giving customers the right value, in the right way, in the right categories.”
Ms Croft said commenting on the lawsuit would be “inappropriate” and Coles would work through the outcome “whatever that may be”.
Releasing financial results to the Australian sharemarket on Friday, the supermarket company recorded an 11.3 per cent dip in profits compared with the same period last year.
At Coles supermarkets specifically, the company’s gross margins increased from 27.1 per cent to 27.8 per cent.
Coles’ legal council delivered closing addresses in the Federal Court of Victoria this week. Picture: NewsWire / Luis Enrique Ascui
In a statement to the ASX, chief executive Leah Weckert said Coles’ industry was highly competitive.
“We have delivered another strong set of results in a highly competitive operating environment, successfully cycling the competitor industrial action disruption in November and December 2024,” she said.
“I would also like to recognise that over the last two months our teams have done an incredible job in managing the impacts of extreme weather events in parts of Australia, ensuring essential items reach local communities in need.”
As well as the physical supermarkets, Coles Group runs Liquorland, Vintage Cellars, First Choice Liquor, an insurance division, credit cards and loans. The business has 1800 stores and 115,000 staff.
At the supermarkets, for the second half of 2025 revenue rose 3.6 per cent to $21.4bn – excluding tobacco.
Excluding tobacco, price inflation hit 1.7 per cent in the final three months of the calendar year.
“ … with the increase primarily driven by dairy and red meat and easing deflation in non-food categories,” the company said in the results.
Coles is in the middle of being sued by the consumer watchdog over allegations consumers were deceived by ‘sale’ prices. Picture: NewsWire / Gaye Gerard
“Whilst red meat shelf prices rose, the full impact of beef and lamb livestock cost of goods sold was partially absorbed by Coles as part of our investment in value for customers.”
At the liquor stores, sales revenues were down 3.2 per cent compared with the second half of 2025.
“The market remained subdued and competitive intensity increased, particularly in the second quarter,” Coles said.
“Notwithstanding this, we saw positive sales growth across our convenience portfolio, which accounts for approximately 90 per cent of our store fleet.”
Headlined in the financial results as “other”, Coles points to a decline in tobacco sales as the main cause of a 22 per cent dip in “other” sales revenue.
Despite the 11.3 per cent dip in Coles Group’s first-half profit, shareholders will get a $0.41 interim dividend, up from $0.37 the year before.
Based on Coles’ own customer surveys, item availability, quality, and store look and feel perceptions all rose considerably, and price perceptions improved but less so.