Australia’s consumers are feeling more upbeat heading into Christmas 2025
Lower interest rates and moderating inflation are giving households more reasons to splurge this Christmas. CEO Leah Weckert would know, her retailer is in the enviable position of superior sales growth.
Coles boss Leah Weckert says consumers are feeling better leading into Christmas this year, detecting a jolt of confidence ahead of the critical trading period as Coles and larger rival Woolworths jostle for market supremacy.
Coles boasted accelerating sales momentum between July and August, double that of its arch rival. They are separated by just $900m in market capitalisation with Woolworths’ $32bn to Coles’ $31.1bn.
With Reserve Bank interest rate cuts feeding through to household budgets, plus the benefit of moderating inflation, Coles and Woolworths are chasing the consumer dollar with big ticket promotions.
Ms Weckert said families have more comfort to ‘splurge’ this year, unveiling the supermarket’s Christmas range on Thursday that features 340 private label products across groceries, gifts, decorations and liquor.
“I think the interest rate cuts have definitely helped and given people some confidence that things are maybe going to get a little bit easier going forward. Certainly within our business last year we were only at 1.5 per cent inflation for the year... so they just haven’t been seeing the increases in prices that they saw two or three years ago,” Ms Weckert told The Australian.
“Our latest surveys have told us more customers than last year are going to be really celebrating Christmas, so that means more people exchanging gifts, more people putting a tree up and more people decorating their house,” Ms Weckert said.
Coles research found 12 per cent of consumers were preparing to spend more money this Christmas compared to 2024, and that among those increasing their spending, the majority are prioritising food (71 per cent), and more than a third of that group (37 per cent) are seeking out premium and gourmet products to elevate their tables.
“That’s a good early sign of some renewed confidence that is coming through and what is the really pleasing number that came through in the research is that about 92 per cent of Australian families this year are going to splurge on some element of the Christmas meal. And the biggest area within that is meat, seafood and desserts - but all of that I think is laddering up to customers and Australian families feeling a little more confident.”
She believes that ‘urge to splurge’ will be increasingly directed toward food and groceries, and especially private label goods. Typically private label goods account for one third of sales through the year at Coles, but at Christmas that number lifts.
Coles has invested heavily in the quality and packaging of its festive season home brand products, such as this year’s designated showstopper, Coles Finest boneless chicken with prosciutto wrapped d’Affinois cheese.
Unlike Woolworths, Coles is a combined food and liquor group. (Woolworths spun out its liquor arm behind Dan Murphy’s and BWS as a separately listed company in 2021). As such, Coles invested in widening its liquor offer to add a private label Libertas limoncello spritz and Nomikai hard lemon drink, a close match to the incredibly popular Hard Rated canned alcoholic beverage made by Asahi.
That expanded liquor offer comes as Coles refashions its liquor arm to collapse its previous three retail banners Liquorland, First Choice and Vintage Cellars into one unified brand (Liquorland).
Ms Weckert is one of 20 retail executives who have called on Victorian Premier Jacinta Allan to act urgently applying new legislation to combat the rampant crime wave now gripping the state.
Those chief executives signed a joint letter to the Premier requesting the state act immediately on a range of crime prevention policies as criminal gangs ransack shops, threaten retail staff, and deal in black market meat sold to restaurants.
“The (retail) industry’s view on this has been clear for some time, every team member, every customer deserves to come into our stores and feel safe and at the moment that is not the case in Victoria,” Ms Weckert said.
“And we think there needs to be a look at what legislative changes can be made potentially pulling Victoria in line with some other states to improve that situation.”
Coles shares rose 13c to $23.20.
