![\"Jessica](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/01\/1d6419be13aa9280d0a4132d991ec3d3adfaaaf85e9396b2f7a52ebb2dd15b00.png\")
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February 27, 2026 \u2014 12:56pm<\/p>\n
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Remove items from your saved list<\/a> to add more.<\/p>\n Save this article for later<\/p>\n Add articles to your saved list and come back to them anytime.<\/p>\n Got it<\/p>\n AAA<\/p>\n Coles boss Leah Weckert says markdowns and specials are the biggest sales drivers for the supermarket, after the company wrapped up a fortnight-long court battle<\/a> against the competition watchdog over allegedly illusory discounts.<\/p>\n Australia\u2019s second-largest grocery giant grew supermarket sales by 3.6 per cent, excluding tobacco, during the first half of the 2026 financial year as people sought promotions and specials to manage their budgets. However, the result fell short of market expectations and investors sent Coles shares down 7.4 per cent to $20.56.<\/p>\n \u201cWe still have very high levels of promotional penetration in our stores, and the biggest uplifts that we get every week are from the promotions that we have on high-low [pricing],\u201d Weckert told this masthead.<\/p>\n The supermarket\u2019s \u201cDown Down\u201d and \u201cEveryday Value\u201d discounts were subject to intense scrutiny last week in the Federal Court by the ACCC\u2019s top legal counsels<\/a>, who sought to prove Coles\u2019 discounts in 2022 and 2023 were misleading by saying it raised prices on a sample of everyday items ahead of its promotions so it could then claim to have put the products on special.<\/p>\n The court heard of internal emails on pricing negotiations between supermarket middle management and their suppliers that showed Coles broke its internal \u201cguardrails\u201d<\/a>. Coles has defended the case.<\/p>\n On Friday, Weckert said the supermarket was always tweaking its discount strategies as customers hunted for value and traded down to more affordable options.<\/p>\n Related Article \u201cWe\u2019re constantly optimising what promotional mechanic we use for products,\u201d said Weckert, pointing to competition from retailers like Chemist Warehouse and Bunnings that jockey with the grocery giant in areas like pet food, health and beauty and cleaning products.<\/p>\n \u201cIt absolutely makes sense to make sure we\u2019ve got those on an [everyday low] price so they compare really strongly with offers you might be able to get at other retailers.\u201d<\/p>\n Coles\u2019 overall group sales rose 2.5 per cent to $23.6 billion for the half-year period. Net profits declined 11.3 per cent to $511 million after the retailer set aside $165 million to cover penalties incurred for an underpayment scandal<\/a> that found both Coles and Woolworths had failed to keep accurate records of staff rosters. Excluding the one-off penalty, Coles\u2019 net profits actually rose 12.5 per cent to $676 million. The company will pay a fully franked interim dividend of 41\u00a2 per share.<\/p>\n The result keeps it ahead of arch rival Woolworths, which is starting to recover sales momentum after investing heavily into lowering prices<\/a>.<\/p>\n \u201cWith a recent reversal of market share trends, notwithstanding industrial action impacts in the previous corresponding period, focus will likely be on Coles\u2019 capacity to regain share through building on execution and potential price investment,\u201d said RBC Capital Markets analyst Michael Toner.<\/p>\n There were improvements in consumer sentiment in the lead-up to Christmas but shoppers are expected to keep their belts tight amid expectations of further interest rate hikes to come.<\/p>\n Cost-of-living issues continued to challenge households, Weckert said.<\/p>\n Related Article \u201cThe interest rate rise we saw earlier this month has knocked that confidence a little bit,\u201d she said. \u201cAt the moment, we haven\u2019t seen any noticeable differences in behaviour in terms of that translating through. But it\u2019s only [been] a couple of weeks post the rate rise, so it\u2019s something to keep a close eye on as we move forward.\u201d<\/p>\n Coles\u2019 liquor sales fell 3.2 per cent as consumers reined in discretionary spending. That was a \u201cvery pleasing\u201d result, Weckert said, given the backdrop of a \u201cvery challenging market\u201d.<\/p>\n \u201cPeople are spending less on liquor because it tends to behave in a slightly more discretionary way than food does,\u201d she said.<\/p>\n \u201cThe market continues to be subdued as we see a shift in terms of lower levels of consumption of alcohol, and that\u2019s a generational trend that we have been seeing for a very long time.\u201d<\/p>\n Elsewhere among retailers, Harvey Norman recorded strong half-year revenue growth of 6.9 per cent to $5.16 billion. Profits after tax rose 15.2 per cent for the first half of the 2026 financial year.<\/p>\n The whitegoods and home appliances retailer lifted overseas company-operated store profits by 35.6 per cent. It will pay a fully franked interim dividend of 14.5\u00a2 per share.<\/p>\n The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n Remove items from your saved list<\/a> to add more.<\/p>\n![\"Coles](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/863aa3902e161141b314f19e3bc027532a5944c3.jpeg\")
Coles chief executive Leah Weckert.Arsineh Houspian<\/p>\n![\"Woolworths](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/880bd61e1d6c75f658d67b3e26bb1097800f61f9.jpeg\")
<\/a><\/p>\n![\"Down](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/66368856822421921c8578ff56ea0802d639a3c5.jpeg\")
<\/a><\/p>\n![\"Jessica](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/01\/1767770052_926_1d6419be13aa9280d0a4132d991ec3d3adfaaaf85e9396b2f7a52ebb2dd15b00.png\")
Jessica Yun<\/a> is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect via X<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"February 27, 2026 \u2014 12:56pm Save You have reached your maximum number of saved items. Remove items from…\n","protected":false},"author":2,"featured_media":508318,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":{"0":"post-508317","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-au","9":"tag-australia","10":"tag-business"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/508317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=508317"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/508317\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/508318"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=508317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=508317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=508317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}