Coles Group delivered a largely in-line September quarter, with its supermarket division outperforming rival Woolworths, according to RBC Capital Markets analyst Michael Toner. Coles is a major Australian retailer operating supermarkets, liquor stores, and convenience stores. The company aims to provide customers with quality, value, and service across its store network.
Supermarket sales for Coles increased by 4.6 per cent, slightly below the consensus estimate of 4.7 per cent, but ahead of Woolworths’ 1.6 per cent growth. Excluding tobacco sales, Coles saw a 7 per cent increase, aligning with the company’s update for the first eight weeks. Shelf inflation at Coles was 1.2 per cent, contrasting with Woolworths’ -0.3 per cent, while eCommerce penetration rose 2.4 per cent year-on-year.
Liquor sales were weaker, with comparable sales down 1.4 per cent, falling short of RBC’s expected 0.3 per cent increase. This reflects ongoing structural and cyclical challenges in the liquor sector. During the quarter, Coles added a net total of two supermarkets and closed three liquor stores. Toner indicated that the FY26 guidance implies approximately three net supermarket openings and one liquor store closure per quarter.
Coles completed three supermarket renewals and 61 liquor renewals, with the goal of completing most remaining ‘Simply Liquorland’ conversions by the end of the year. Toner noted that supermarket sales momentum appears to have continued into the early part of the second quarter of FY26. However, Coles anticipates tougher competition later in the quarter as it laps the prior year’s benefit from industrial action affecting Woolworths. As of 11am AEDT, shares in Coles were down 2 per cent.
