Growing taste for takeaway hits Coles sales

Takeaway food is enjoying boom times, as supermarket meal and grocery offerings struggle to compete.

The shift to takeaway is being fuelled by the proliferation of online ordering platforms. Picture: Luke Marsden.

Call it laziness, or call it a reluctance to leave a warm home for a trip to the local shops in the midst of an extended cold snap across Australia, but consumers are more than ever before dialling up or going online for takeaway and home delivered food — to the cost of supermarkets like Coles and Woolworths.

That growing trend was evident, in part, in the latest sales update from Australia’s second biggest supermarket chain Coles, which revealed that over the three months to September its food and grocery sales slowed by nearly half to just growth of 1.7 per cent.

It was the slowest sales growth for Coles since 2009, with the chain’s boss John Durkan conceding the grocery market had slowed. At the same time competition from a recovering Woolworths and the aggressively expansionist German discounter Aldi had meant the chains dare not pull back on promotions and forcing down prices, he noted.

But while retail sales have proved surprisingly flat, and at times negative, since April — putting Australia on track to generate the type of spending that would struggle to lift by one third of the average for the last two decades — takeaway food is enjoying boom times.

A recent survey from NAB showed that takeaway food had the fastest annual online sales growth, growing 56 per cent in the past year. Australian Bureau of Statistics data has backed that up, revealing takeaway food services were up 11.43 per cent annually in the year to August, when over the same period supermarket sales were anaemic at 2.71 per cent annual growth.

And it could have something to do with the poor weather conditions, as rain, hail and dark clouds have encouraged consumers to stay rugged up on the couch rather than brave a wintry trek to the supermarket.

“There is some seasonality to this, if you can get a colder than normal or wetter than normal weather, what that means is that people stay indoors now that may mean they dial up for pizza or dial up for takeaway,’’ said CommSec chief economist Craig James.

“Weather conditions can have an impact on spending levels.’’

This shift to takeaway is being fuelled by the proliferation of online ordering platforms, such as menulog and Deliveroo, which has made ordering takeaway meals much more easy and greatly expanded the pool of restaurants able to drive meals over to people’s homes.

“The type of offering we are getting from takeaway has lifted a notch,’’ Mr James said, “such as gourmet options which might be taking market share from cafes, restaurants and supermarkets.’’

Richard Goyder, the chief executive of Wesfarmers, the Perth-based conglomerate that owns Coles, has also commented that consumers in general are cautious and softening their spending patterns.

“I think consumers are watchful, they are purposeful and the way that manifests itself in retail is we have got to be at our best in terms of price, range, service in all of our businesses,’’ Mr Goyder said.

“I don’t think there has been significant movement in terms of consumer confidence … confidence is OK at the moment and I think people will want to see what the results are in the US election and then baring any other news on the global front. I think things in Australia are moving along OK at the moment.’’

The nation’s biggest supermarket chain, Woolworths, will release its latest quarterly sales results on Friday, and will provide further insight into the challenge facing established retailers and supermarket chains as consumers consider the old chestnut — ‘takeaway or cook something tonight?’

A recent NAB survey showed 56 per cent annual online sales growth for takeaway food.