Endeavour Group and Coles Liquor have each published Q1 FY25 retail sales revenue figures identical to those of the year prior. For Endeavour Group retail banners, $2,538 million was generated in the 14 weeks from 1 July to 6 October in both 2023 (FY24) and this year (FY25), whilst Coles Liquor again generated $851 million over the same period.

Both groups attributed the lack of sales growth to pressures associated with current economic headwinds, with Endeavour Group issuing a orofit warning saying ongoing inflationary pressure is expected to have an adverse effect on Q2 sales.

"Endeavour Group delivered a stable trading performance in the first quarter as cost of living pressures continued to impact consumer spending in our categories,” said Steve Donohue, Managing Director and CEO.

“In the near term, softer sales and a lower margin sales mix, resulting from both a higher percentage of sales on promotion and consumer downtrading, are expected to impact Retail profitability. Continued inflationary pressure on operating costs is also impacting margins.”

Similarly, Coles Group CEO Leah Weckert said, “Cost of living remains a challenge for many of our customers, and we are focused on helping them find value in our stores through weekly specials, value campaigns, Flybuys and exclusive brands.”

According to Steve Donohue, Endeavour Group retail sales momentum slowed at the end of the quarter in September despite a strong start to the new financial year.

"After a positive start to the year, Retail sales momentum slowed in September,” he said.

“During the quarter, promotional intensity lifted across the sector as customers became increasingly value conscious. In challenging market conditions, our Retail business has continued to execute well - growing our market share, maintaining our best-in-class Voice of Customer scores and expanding the My Dan's loyalty base to 5.5 million active members.”

Looking ahead, both of Australia’s major retail groups will be looking to increase their value offer to consumers in the lead up to the festive holiday period.

In its statement to the ASX, Coles Liquor wrote that “sales revenue growth remains subdued with the business focused on providing a compelling value proposition for the festive season.”

Similarly, Donohue said, “in response to inflationary cost pressure in both Retail and Hotels, the Group is tightly managing CODB and continuing to implement a program of measures to make the Group a simpler and more efficient end to end business.”

These measures include evolving its Jimmy Brings business into a partnership model with Milkrun, developing its endeavourGO optimisation program, separating its people systems under the One Endeavour program, remodelling its digital marketing teams under endeavourX, and continuing to focus on inventory management to deliver working capital benefits.

"These measures are designed to position the Group to deliver improved returns to our shareholders once retail trading conditions start to recover,” said Donohue.

"Looking ahead, the second quarter remains an important period for the Group, featuring the annual Black Friday and Cyber Monday sales events as well as key social occasions including Spring Racing, the Christmas festive season, New Year celebrations and summer entertaining. We are well prepared to execute successfully over the peak trading period by delivering the best prices, service and experiences for customers.”

Coles Liquor has also announced it will be constructing a third automated distribution centre in Truganina, Victoria, following the successful completion of its Queensland and New South Wales ADC facilities. This project is expected to commence during FY25.

Coles Liquor will also be commencing its pilot program to consolidate banners under the Liquorland brand this November.

"As our customers remain focused on cost of living pressures, we will continue to invest in value providing a competitive and compelling offer for Australian families,” said Leah Weckert.

“We are also investing for the future in projects such as our automated distribution centres. These will improve the efficiency of our business, enabling us to support further investment in the customer offer and deliver returns to our shareholders for many years to come."

Despite the stable retail performance, Endeavour Group's ALH Hotels division experienced 2.5% growth over the quarter, whilst Coles supermarkets grew by 3.5%.

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