Key facts
- Coles' supermarket sales growth slowed in the first four weeks of the second quarter.
- Coles' first-quarter sales revenue rose 3.6% to A$10.32 billion.
- Coles' liquor sales revenue decline was in line with the first quarter's drop of 1.3%.
Australia's second-largest grocer Coles said on Friday that heightened promotional activity by competitors hurt early second-quarter sales, as cost-conscious shoppers sought bargains, sending its shares to a more than five-month low. The stock fell as much as 12.8% to A$20.47 by 2353 GMT, marking their worst intraday session and was among the worst performer in the broader S&P/ASX 200 index, which rose 0.7%. Shoppers continued to compare prices across retailers and channels, while making greater use of promotions and loyalty programmes to manage household budgets. Supermarket sales growth slowed in the first four weeks of the second quarter from 3.6% in the first quarter, missing a Visible Alpha consensus forecast of 5% for the second quarter. Coles said it was taking "deliberate actions to strengthen momentum", including relaunching its Every Day Price programme, which locks in lower prices on selected products for at least six months, to attract value-focused shoppers. The company also flagged higher fuel-related costs in the first half due to increased fuel prices over the past two months and expects first-half supermarket EBIT to be in line with the prior corresponding period. The decline in liquor sales revenue in the early part of the second quarter was broadly in line with the first quarter drop of 1.3%. Coles reported total group sales revenue of A$11.21 billion ($7.88 billion) for the three-month period ended September 27, missing Visible Alpha's estimate of A$11.31 billion. Sales were at A$10.96 billion a year earlier.