Coles 1Q Same-Store Food Sales Up 2.7%, Fuel Costs to Dent Profits

By David Winning

SYDNEY--Coles Group said same-store sales at its supermarkets rose by 2.7% in the first three months of fiscal 2027, lagging behind chief rival Woolworths as the battle for the budget-conscious food shopper intensifies.

Coles said supermarket sales revenue totaled 10.32 billion Australian dollars, equivalent to US$7.25 billion, in the 13 weeks through September 27. On a total basis, supermarket sales rose by 3.6% compared to a year earlier.

It warned that rising fuel costs over the past two months would leave its mark on profits, as tensions continued to flare in the Middle East. Management signaled additional fuel-related costs in the first half of its fiscal year compared to the same period of fiscal 2026.

"As a result of the above, we now expect first half Supermarkets earnings before interest and tax to be in line with the prior corresponding period," Coles said.

The trading snapshot was provided in the same week that Woolworths reported a 6.9% rise in its food sales in Australia, albeit across a period that ran for 14 weeks through October 4.

Shoppers are feeling the pinch as interest rates have risen this year, fuel costs have jumped on a tightening global market due to the Middle East conflict, and property prices have fallen back to damp the household wealth effect.

Coles acknowledged those challenges on Friday. It said customers continued to shop across retailers and channels, while being more involved in promotions and loyalty programs.

Coles said it has responded to pressure on consumer budgets by investing more in so-called everyday value ranges, no-frills produce, and in meat.

"From a category perspective, Fresh performed strongly, growing ahead of the rest of store, led by meat and dairy," Coles said of its first-quarter performance.

It said price inflation remained broadly stable at 1.1%, but driven by cost price rises in dairy and meat, and moderating deflation in fresh produce.

"During the quarter we were encouraged by strong eCommerce growth, continued gains in Exclusive to Coles and progress across our capital investment program," said Leah Weckert, Coles's chief executive and managing director.

In its liquor business, Coles reported A$831 million sales revenue in the first quarter, which was down 1.3% on a comparable basis.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

October 29, 2026 18:05 ET (22:05 GMT)