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Coles Group Ltd COL

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Morningstar’s Analysis

Currency in AUD
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5-Star Price


Economic Moat


Capital Allocation


Shifting Customer Preferences Force Coles to Step Up Its Spending

Analyst Note

| Johannes Faul, CFA |

We maintain our AUD 13.00 per share fair value estimate for no-moat-rated Coles. The key takeaway from Coles’ Investor Strategy Day is its e-commerce continues to outperform its brick-and-mortar food and liquor sales growth. But the online channel requires more capital to support this growth. Coles is currently on the back foot in terms of online sales penetration in food and liquor retailing compared with market leaders Woolworths and Endeavour, respectively. Coles’ management guided to a significant increase in capital spending in fiscal 2022 and beyond, most of which is earmarked to improve its digital capabilities and to renew its physical stores.

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Company Profile

Business Description

Coles Group Limited is one of Australia's largest retailers, operating the second-largest supermarket chain behind market leader Woolworths, and is the country's third-largest liquor retailer. The group has an extensive store network of about 2,500 store outlets and roughly 80% of Australian live within a 10-minute drive from their nearest Coles store. The retailer employs some 110,000 people, who process over 20 million individual customer transactions a week. This compares with Woolworths processing almost 30 million customer transactions per week from Australia's population of 25 million.

800 Toorak Road
Hawthorn East, VIC, 3123, Australia
T +61 398295111
Sector Consumer Defensive
Industry Grocery Stores
Most Recent Earnings
Fiscal Year End Jun 28, 2021
Stock Type

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