Early Christmas cheer for grocery giant Coles
Coles chief executive Steven Cain says despite a tough retail climate, the supermarket giant’s sales momentum is building as it heads towards Christmas.
Business
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Coles chief executive Steven Cain says the supermarket giant is showing “resilience” in the face of a tough retail climate and sales momentum is building as it heads into Christmas.
Speaking at the retailer’s first annual meeting since it was spun out of Wesfarmers, Mr Cain said a focus on convenience, health foods, online sales and automation was delivering for the group.
“While the Australian food and beverage market continues to grow, customer needs and our competitive set are changing faster than ever,” Mr Cain said on Wednesday.
“Our refreshed strategy … will allow us to at least maintain market share in the medium term whilst maintaining a strong balance sheet and attractive dividends.”
Mr Cain did not provide a formal trading update but indicated like-for-like sales, a closely watched industry metric which strips out stores opening or closing, were picking up as it heads into the key Christmas period.
“As we near the key Christmas trading period, we are seeing increased sales momentum that demonstrates the changes we are making to inspire customers are beginning to make a difference,” he said.
Like-for-like sales at Coles rose a wafer thin 0.1 per cent for the 13 weeks to September 29 compared with the same period a year earlier.
The slowdown in sales growth came as the retailer cycled off a 5.1 per cent jump notched up in 2018 as it enjoyed the rewards of its original Little Shop promotion and its decision to slow the phase-out of free single-use plastic bags.
Coles’ annual meeting was dominated by questions about the poor treatment of workers employed by its fresh-food growers.
It also aired complaints from workers who will lose their jobs when Coles builds a number of new automated warehouses.
Activist shareholder group the Australasian Centre for Corporate Responsibility failed in its push to pass a resolution which would have forced Coles to consult the workers of suppliers during the supplier accreditation process.
The meeting heard from a number of workers who alleged poor and illegal treatment from fresh-food suppliers, including being underpaid or having wages withheld.
Mr Cain said Coles was willing and ready to take action against any complaint a worker provided to it about a supplier.
Coles had set up a hotline in 2015 for workers to report any bad behaviour, he said.
“This is a zero-tolerance thing for us,” Mr Cain said.
“We need to stamp this out in the whole horticultural supply chain as soon as possible.
“We will follow up on each one of these things immediately and, if there is anything going on, supply will stop immediately.
“You have my absolute word on that.”
Coles’ share price has risen by more than 20 per cent since it listed in November last year
Its annual meeting was held as the latest read on consumer confidence showed it regaining some ground, although pessimists still outweigh optimists.
The Westpac-Melbourne Institute consumer sentiment gained 4.5 per cent to 97 points in November, remaining below the 100-point neutral mark, after a 5.5 per cent drop in October.
The latest poll picked up responses to the Reserve Bank’s decision to keep the cash rate unchanged earlier this month.
Westpac economist Bill Evans said: “The pattern of confidence falling in response to a rate cut and recovering when the RBA remains on hold repeats what we saw earlier in the year.”