Coles boss Leah Weckert says shoppers feeling more optimistic but still cutting back on takeaways, treats

Coles boss Leah Weckert says shoppers are feeling more optimistic thanks to three rounds of interest rate cuts this year, but the supermarket giant is yet to see a change in cost-cutting behaviours.

Ms Weckert on Tuesday said shoppers continued to keep value front of mind and were still cutting back on takeaways and treats, shopping across multiple stores, researching prices and using loyalty points.

“I think we’re seeing those green shoots around sentiment,” Ms Weckert told media on a call.

“The question is going to be, when do we start to see some of the behaviour change and catch up with that? And the timing on that is a bit unclear at this stage.”

Shares in Coles jumped 7.5 per cent to $22.29 in early trade after it reported a 3.6 per cent lift in full-year revenue of $44.5 billion on a normalised basis accounting for an extra week of trade in 2024. The result was in line with consensus estimates.

Sales at its 860 supermarket rose 4.3 per cent to $39.9b amid strong demand for its premium home brand range Coles Finest, which posted a 13.6 per cent revenue growth.

Excluding tobacco, sales jumped by 5.7 per cent. Coles noted a 30 per cent decline in tobacco sales following the impact of new tobacco legislation and growth in the illicit market.

The growth in supermarket offset weaker sales in liquor, which is the midst of a simplification program that will see its Vintage Cellars and First Choice Liquor Market chains folded into the better-known Liquorland brand.

Liquor sales posted modest 1.1 per cent growth to $3.7b as earnings slid.

“The liquor market remained subdued throughout the year with cost-of-living pressures continuing to influence customer behaviours,” Coles said.

“However, sales growth was supported by new stores, including our Tasmanian acquisition, strong trading across key events, including Christmas and Easter, and a positive response to increased tailoring of store ranges to cater for local demand, particularly in the wine category.”

Coles delivered a profit of $1.08b, down 3.5 per cent, but up 2.4 per cent on a normalised basis.

Underlying earnings before interest, tax, depreciation and amortisation was up 6.8 per cent to $2.22b.

In the first eight weeks of the new financial year, supermarkets sales grew by 4.9 per cent (7 per cent excluding tobacco), while liquor was flat.

Coles will pay out a final fully franked dividend of 32¢ a share.