Stikeez delivers Coles sales growth by driving ‘high customer engagement’

Supermarket giant Coles has reported strong third-quarter sales growth — and a simple child’s toy is largely being credited.

Supermarket giant Coles has reported third-quarter sales growth thanks to its latest collectable miniature toys campaign.

Comparable sales growth was up 2.4 per cent for the quarter, with the “Fresh Stikeez” promotional campaign driving high customer engagement, the company said in a statement to the Australian share market.

Coles lifted food and liquor sales 2.1 per cent to $8.0 billion over the 12 weeks to March 24, while supermarket sales revenue was up 3.2 per cent to $7.27 million.

The Stikeez campaign boosted customer engagement, Coles said.

The Stikeez campaign followed the supermarket’s wildly successful Little Shop scheme from last year, which Coles said helped it deliver comparable sales growth of 5.1 per cent in the first quarter.

It also went head-to-head with fierce rivals Woolworths, which had its own promotion dubbed Disney Words.

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Chief executive Steven Cain told reporters today the supermarket giant had an open mind about dipping its toes in similar campaigns but is also wary of “promotional fatigue” being felt by consumers.

“We’re always looking at ways of adding value to the shop,” he said.

“It started with Little Shop last year, which was popular with both kids and adults.

“Then we moved into Stikeez, which was very much around kids, albeit that feedback from check-outs was also very excited grandparents picking them up for their grandchildren.”

Coles announced a new campaign last week aimed at adults where customers will be given in-store credit to go towards plastic containers each time they shop.

“We’ve got an open mind as to what the future holds. What is quite apparent is that there might be some promotional fatigue out in the marketplace, and consumers are excited by new ideas, which they can collect alongside their supermarket shop,” Mr Cain said.

The pre-election Budget from the Scott Morrison Government and the subsequent reply from the Labor Party promised lower to middle income Australians tax cuts to sway voters on the eve of the federal election.

But Mr Cain told reporters in the quarterly update he hadn’t seen any evidence in the sales data to suggest those cuts have encouraged spending in Coles stores.

“There’s certainly no evidence yet that people are out spending any potential tax cuts in the business,” he said.

He says the result shows there is disparity when assessing the cost-of-living pressures weighing on many Australians, while others are coping better.

“We have a lot of customers doing it tough, we can see that, and we can see home brand growing,” the chief executive said.

“And then we can also see the convenience business growing with things like Uber Eats.

“Clearly, if there are interest rates cuts that makes people feel a lot better.”

Mr Cain said the third quarter result was a “solid outcome” overall.

“We know that customer expectations are changing faster than ever, and we are resolutely focused on delivering our ‘fresh tomorrow’ strategy,” he said.

Coles also recorded strong online sales growth, jumping 27 per cent with “sales over $1 billion on a rolling 12-month basis”, the company said.

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