Coles sees online liquor sales grow by 80 per cent

28 October, 2020 by Andy Young

Coles has reported its first quarter sales results, with group sales revenue increasing by 10.5 per cent to $9.6bn, while liquor comparable sales grew by 17.8 per cent including online liquor sales growth of 80 per cent.

Liquor sales revenue was $852m for the first quarter, an increase of 17.4 per cent on the prior corresponding period, with comparable sales growth of 17.8 per cent.

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Coles said the liquor sales growth was driven across all three banners, channels and categories adding that its customers continued to prefer shopping in larger format stores with First Choice Liquor Market being a highlight in the quarter.

The strong online sales growth was driven by previous investments in technology platforms, an improved customer experience and increased capacity.

Coles said: “Progress has been made under Liquor’s refreshed strategy ‘to become a locally relevant drinks specialist with a differentiated offer’.

“During the quarter, Liquor implemented a new customer focused organisational structure. In addition, the operating model was simplified and investment in service was also made which supported improved availability in store. In online, systems investments will further improve fulfilment and the customer experience across all three Liquor websites.

“A focus to grow Exclusive Liquor Brands and local ranges has now seen the national launch of more than 400 new state local products, including 89 launched in the first quarter.”

Detailing the impact of COVID-19 on the liquor business, Coles said: Liquor sales remained elevated throughout the first quarter across all states despite the relaxation of on-premise consumption of liquor in some states.

“The trends in buying patterns experienced in the latter part of the prior financial year continued, with customers purchasing value-oriented larger pack sizes in beer and spirits while online sales remained strong.”

The Champagne, gin and single malt whisky categories all grew by more than 50 per cent for Coles, however the group reported that the cask wine category declined as customers changed drinking behaviours.

Coles also said that its Liquorland trial concept store in Oakleigh has “experienced positive feedback from customers and team members” and that additional trial stores are set to launch in the second quarter.

The First Choice Liquor Market renewal program has continued with five more conversions during the quarter, meaning that 67 per cent of the First Choice network is now in the new format.

There has also been a Vintage Cellars trial concept in Ashburton, which the group said “continues to perform strongly” and that learnings from that concept store would be applied to further renewals in the second quarter.

Speaking of the overall group’s performance, Coles Group CEO, Steven Cain, said: “We have made further progress executing our strategy to ensure the long-term growth of Coles, particularly in digital and online. This is despite significant COVID related restrictions in Victoria related to our main Store Support Centre, our distribution centres, our meat suppliers and of course, our customers – many of whom were not able to visit their regular Coles store due to the restriction on not travelling more than 5 kilometres from home or permitted workplaces.

“After a year like no other, and as we head into summer and Christmas, Coles is ready to play an inspiring part in lowering the cost of the many smaller celebrations that will take place as Australians reunite with their friends and family.

“As we enter a new COVID normal, Coles will continue to prioritise the health and safety of our customers and team members throughout our store network and supply chain.

“I would like to thank our team, our suppliers, our community partners, the state and federal governments, and of course our customers for helping us to navigate our collective way through the first and second waves of COVID. We have been proud to serve as an essential needs business during this, the greatest test of our lifetime, and look forward to proudly serving and contributing as Australia begins its recovery and growth phase.”

Over the quarter the Coles Liquor network saw 13 new stores opened and two stores closed, bringing the total network to 921 liquor sites, with a net selling area of 214,930 (MAT sqm).