While Coles’ supermarket sales are holding up well, a shock drop in its liquor division tells a story about the growing pain of interest rates.
Already a subscriber?After the month Coles chief executive Leah Weckert has had, she could be forgiven for needing a drink or six. Accusations of price gouging,
Online supermarket sales are also cooking, rising 35 per cent in the March quarter to take online sales penetration to 9.3 per cent. The importance of the supermarket’s digital offerings is only heading in one direction. Weckert calls the hottest retail trend “click, browse and cross-shop”; about 20 per cent of shoppers are checking prices online before heading into a store, and they’re more than willing to visit multiple retailers to save a buck.
These pressures are being felt across the market, Weckert says, leading to more discounting, particularly online. But with interest rate cuts now drifting off into the distance, Coles isn’t expecting a quick turnaround; its latest consumer survey showed 30 per cent of shoppers are planning on cutting back on booze as part of their broader plans to manage cost of living challenges.
“There is very little customer loyalty around ,” Weckert says. “It’s entirely based on the price that is paid.”Coles’ focus instead will be on the retail liquor business, and Weckert is comfortable the group is holding the line on market share.
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