Coles’ comparable food and liquor store sales increased 4.9 per cent for the third quarter ending March. With liquor stripped out, the retailer’s underlying food store sales grew at exactly the same rate.
“It’s the first time in a while that liquor hasn’t been a drag,” commented Goldman Sachs analyst Adam Alexander.
Wesfarmers Finance Director Terry Bowen said that all of Coles Liquor’s retail banners had shown improvements in comparative sales.
“There’s no doubt that Liquorland drove the performance and that’s where we’ve been putting in most of our effort,” he said.
He said the retailer had reaped the benefits of, “a more relevant range for customers in the various formats…[and] trying to make sure that price points were really sharp.”
Headline food and liquor sales for the quarter were $7.5 billion, up 5.9 per cent on the previous corresponding period. Food and liquor sales for the financial year to date increased 5.6 per cent to $24.2 billion, or 4.4 per cent when adjusted for the earlier timing of Easter in the 2016 financial year.
“The transformation of our liquor business continues to progress in line with expectations. Work done on price, range and in-store experience led to improved sales trends throughout the period,” commented Coles Managing Director John Durkan.
“As we transition to the next phase of the turnaround, we see room for continued improvement in our customer offering.”
Liquor continued to reshape its store network, with five new liquor stores opened and seven closed during the period. At the end of the quarter, Coles had a total of 863 liquor stores and 89 hotels.
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