Coles: Supermarket Sales Growth to Normalize With Easing Grocery Inflation
Australian shoppers are still hurting. The Australian Bureau of Statistics estimates total retailing sales increased by only 1% in the March quarter of 2024 compared with the previous corresponding period. At Coles, the pressure on household budgets is evident in the shift to better-value, private-label brands and subdued spending on liquor. Excluding tobacco, Coles’ total supermarket sales increased by 7% in the quarter, while sales of its exclusive brands increased by 9%. In the small liquor business, accounting for less than 10% of group earnings, sales declined by 2%. Third-quarter group sales are up 6% on the PCP, tracking our full-year sales growth estimate after adjusting for an additional trading week in the fourth quarter. Our fiscal 2024 earnings per share estimate of AUD 0.80 stands.