Coles Liquor records third quarter growth

29 April, 2020 by Andy Young

Coles has released its third quarter results, which saw the group overall record sales revenue of $9.2bn, an increase of 12.9 per cent on the prior corresponding period.

In terms of the performance of its liquor division, Coles said liquor was negatively impacted by bushfire smog over capital cities and floods in January and February, before being impacted by COVID-19 later in the quarter. Still, liquor achieved comparable sales growth of 7.2 per cent for the third quarter.

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Liquor sales revenue for the third quarter was $740m, up 6.1 per cent on the prior corresponding period with Coles saying liquor sales increased as a result of COVID-19 later in the quarter.

In its results statement, Coles said: “Prior to the onset of COVID-19, the liquor market remained subdued as customer drinking habits were impacted by the bushfire smog and subsequent floods. Over the quarter there was strong growth in the spirits category, offset in part by lower volumes and beer and ready-to-drink categories during the period when bushfire smog impacted air quality in January.

“Liquor sales growth was also impacted as result of COVID-19. However, the impact on sales in liquor only began to materially elevate in the latter part of March, following the Federal Government’s decision to close hotels, pubs, clubs and licensed venue operators, which in turn led to liquor placing limits of product per customers, soon thereafter.

“Incremental costs incurred in Liquor to support the strong demand were largely consistent with Supermarkets, including in-store service, cleaning and security. Additionally, liquor experienced margin deterioration during the period as customers moved towards more bulk and value-oriented products.”

The Coles focus on its own private label brands continued with sales growth in this area increasing by 10 per cent.

Additionally in the quarter Coles continued its renewal program across the First Choice Liquor Market with four renewals completed. The group also has a Vintage Cellars trial concept operating, which it said has “encouraging early results, particularly in the spirits and wine categories”.

During the quarter, refreshed websites were launched across all three banners which delivered online growth of 34 per cent. Investments were also made in online capacity to support the growing demand for online delivery.

Coles opened two new stores during the quarter and closed six, bringing the total network to 913 retail liquor sites.