A little boost from Coles’ ‘Little Shop’ campaign has helped the chain’s supermarket sales jump during the first quarter and offset a significant drop in the amount of fuel sold.
Coles’ comparable supermarket sales were up 5.1 per cent in the 13 weeks to September 23 as its parent company Wesfarmers prepares to spin-off the chain.
The food sales increase was 0.3 per cent up the corresponding period last year, and up on the previous quarter’s 1.8 per cent lift.
Managing director Rob Scott said the growth showed the supermarket chain had continued to focus on in-store execution as shareholders prepare to vote next month on a proposed $20 billion demerger.
“Strong growth in basket size, transaction numbers and units sold, as well as improvements in fresh market share supported the sales result,” he said in a statement.
Coles’ comparable liquor store sales growth was up 1.3 per cent for the quarter, less than the fourth-quarter growth of two per cent, and slightly down on the 1.6 per cent growth for the corresponding period last year.
The convenience store business was pulled down by a drop in comparable fuel volumes, down 15.9 per cent, but comparable in-store sales excluding petrol sales was up 3.4 per cent because of a focus on food-to-go range, the company said.
The increased cost of fuel driven by higher global oil prices, combined with the falling Australian dollar, is to blame for the continued decrease in petrol sales, Mr Scott said.
“Clearly the broader macro factors are holding back the business,” he said.
“The decrease we’re seeing in weekly fuel volumes has certainly flattened out over the last three quarters from where it was a year ago.”
The sales result was the first for new Coles managing director Steven Cain who said he was “delighted” with the success of the popular ‘Little Shop’ campaign.
The thirty miniature replicas of popular Coles’ products – including Tim Tams, washing powder and jars of Vegemite – have been a hit with children and adults alike.
They have even spawned a Facebook swap-group with more than 23,000 members.
“It’s probably been the most successful short-term campaign the business has ever run,” Mr Cain said.
“Clearly we’ll be doing a proper evaluation of it and deciding what to do in the year ahead.”
Wesfarmers shareholders will vote on the demerger at the conglomerate’s general meeting on November 15, with the anticipation Coles shares will be listed on the ASX on November 21, subject to regulatory approval.
The conglomerate’s shares were down 0.5 per cent to $47.11 at 1358 AEST.