Supermarket giant Coles Group Limited attributed its strong 2021 first quarter sales results, including an online liquor sales increase of 80 per cent to accelerated strategic investment in digital marketing and online capabilities.
The Group reported a first quarter total sales revenue increase of 10.5 per cent to $9.6 billion with liquor sales revenue at $852 million, an increase of 17.4 per cent on the prior corresponding period with comparable sales growth of 17.8 per cent.
Growth in liquor was driven across the retail group’s three banners, channels and categories. Sales in liquor remained strongly elevated across the country despite the relaxing of on-premise consumption of liquor in some states.
Consumption patterns evident in the latter part of FY20 continued with customers preferring value-oriented larger pack sizes in beer and spirits.
In the bricks and mortar format sales at First Choice Liquor Market was the stand out as customers continue to favour larger format stores. Sales per metre were up 11.4 per cent from the prior corresponding period.
The retail group’s previous investment in technology platforms paid off in the period as improved customer service and increased capacity supported the massive growth in online sales of 80 % for the first quarter.
Coles said it would continue to invest in online systems to further improve customer fulfilment and experience across all its three liquor sites.
Categories in growth over the period included Champagne, gin and single malt whisky all of which experienced growth of over 50 per cent. In comparison, cask wine sales declined as consumption behaviours changed in the pandemic environment.
The retailer also announced its commitment to increasing its range through growing its Exclusive Liquor Brands and local ranges. The initiative has seen the national launch of more than 400 state local products, including 89 launched in the first quarter and feeds into the burgeoning consumer post-COVID trend of buying local.
Coles Liquor has also found success through its refreshed strategy to become more 'locally relevant' with a 'differentiated' offering. The quarter saw Liquor implement a new customer-focused organisational structure that also saw investment in service and a streamlined operating model, all of which contributed to improved availability in store.
The company’s liquor network has also increased seeing 13 new stores open in the quarter bringing the total store network to 921 liquor sites.
The period saw Liquorland trial a new concept store in Oakleigh, Victoria, with positive customer feedback leading to additional concept stores scheduled to open in the second quarter.
First Choice Liquor Market has seen five conversions completed in the quarter with the new format rolled out to 67 per cent of the First Choice Liquor network, while a Vintage Cellars trial concept in Ashburton, Victoria will see Coles apply the learnings to other Vintage Cellars store renewals in the second quarter.
In the first four week period of the second quarter liquor comparable sales growth remained strong at 16.9 per cent (15.3 per cent excluding Victoria).
Coles sees the following trends continuing including increased levels of at-home activity and entertaining that will influence the consumption of liquor, while online sales will continue to be strong, and restricted travel will also boost local population numbers impacting sales results.
”We have made further progress executing our strategy to ensure the long-term growth of Coles, particularly in digital and online. This is despite significant COVID related restrictions in Victoria related to our main Store Support Centre, our distribution centres, our meat suppliers and of course, our customers – many of whom were not able to visit their regular Coles store due to the restriction on not travelling more than 5 kilometres from home or permitted workplaces,” Coles Group CEO, Steven Cain said.
“After a year like no other, and as we head into summer and Christmas, Coles is ready to play an inspiring part in lowering the cost of many smaller celebrations that will take place as Australians reunite with their friends and family.
“As we enter a new COVID normal, Coles will continue to prioritise the health and safety of our customers and team members throughout our store network and supply chain.
“I would like to thank our team, our suppliers, our community partners, the state and federal governments, and of course our customers for helping us to navigate our collective way through the first and second waves of COVID. We have been proud to serve as an essential needs business during this, the greatest test of our lifetime, and look forward to proudly serving and contributing as Australia begins its recover and growth phase,” Mr Cain concluded.
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