Coles eyes automation centres, drive to cook at home to continue solid start to 2025 financial year

Coles boss Leah Weckert expects consumer demand for cooking at home to continue, boosting its strong start to the new financial year as a long-awaited set of automated order centres start work.

Australia’s second-largest supermarket on Tuesday reported a sales jump of 3.7 per cent since early last month as it looks to market its value-for-money proposition to customers who continue to feel the pinch from cost-of-living pressures.

Ms Weckert spoke as Coles reported its full-year results for the 2024 financial year, with post-tax profit of almost $1.12 billion in the 2024 financial year, down 4 per cent year-on-year when discontinued operations like its range of petrol stations were included — though that sale to Viva Energy was completed more than 12 months ago.

When excluded, and the results were normalised across a 52-week year (the 2024 financial year had 53 weeks), Coles’ post-tax profit was up 4.1 per cent to $1.21b, and 2.1 per cent when the costs of infrastructure projects for customer fulfilment centres and automatic distribution centres were included.

Supermarkets were again Coles’ strongest result, with sales revenue on a normalised basis up 4.3 per cent to just over $39b — and by 2.6 per cent in the fourth quarter of the financial year. Compared to two years ago, sales in the fourth quarter jumped 10.8 per cent.

“We are being very, very conscious around our competitive position and and making sure that we’ve got something very compelling,” Ms Weckert told analysts.

“The customer right now is spending more time than I’ve seen for many years, researching where they want to buy products. And so we want to make sure that our offer is is very, very sharp.”

That sharp offer is designed to harness underlying demand for cooking at home as consumers look to make ends meet amid personal financial pressures. Sales of the “Coles Finest” premium own-brand label have been among the best performers as shoppers try to replicate restaurant-style meals at home rather than eat out, Ms Weckert said.

At the same time, Coles has also jumped on top of its theft and stock loss issues that prompted a share price dive about a year ago. It reported stronger cost control and efficiency measures like “smart gates” at registers had helped to contain the issue.

Coles expects to open about 13 new stores, close 10 and renew 60 over the course of 2025, with executives noting the cost of construction and renovation, and development snarls, are having an impact on its store roll-out.

The strong results pushed Coles shares up nearly 1.7 per cent to $18.77 — a two-year high and nearing its all-time highs post-Wesfarmers demerger in late 2018.

Coles is also expecting stronger eCommerce sales as its Ocado customer fulfilment centres in Sydney and Melbourne ramp up, while other automated distribution centres in Sydney and Queensland are expected to increase product availability on the east coast, which had been a pain point for Coles for some years.

Coles reported monthly app users were up 42.6 per cent year-on-year, helping to deliver a 30.1 per cent jump in online sales growth.

But while supermarkets had a strong year, Coles’ liquor department — comprising Liquorland, First Choice Liquor and Vintage Cellars — reported soft demand with sales sliding.

Sales revenue was up just 0.5 per cent, with post-tax earnings sliding 13.9 per cent over the year.

Chief liquor rival Endeavour Group — comprising Dan Murphy’s and BWS — on Monday reported a profit fall of 3.2 per cent as consumers tightened their belts.

Coles’ main grocery rival, Woolworths, reports full-year results on Wednesday.