Woolworths back in the game as Coles sales growth weakens

Coles has outperformed Woolworths for a record straight seven years but that run looks like coming to an end.

Woolworths CEO Brad Banducci. More confident about his figures?

Woolworths’ fightback is gaining some traction, with Coles posting its weakest first quarter comparable food and liquor sales increase since the first quarter of 2009.

Coles has outperformed Woolworths for a record straight seven years but that run is looking like coming to an end, with the latter posting its numbers on Friday.

One quarter’s sales figures don’t tell the whole story, but momentum has clearly shifted.

Coles was trading off a 3.6 per cent increase in the first quarter last year while Woolies was trading off negative 1.5 per cent, which puts the comparison in perspective.

Overall today’s sales numbers were not great for Wesfarmers, with Bunnings up 5.5 per cent, Officeworks 7.5 per cent, Kmart 8.2 per cent and Target down a massive 21.9 per cent.

Target scrapped its toy sale which contributed to the fall but in more recent weeks its spring catalogue has also struggled and there is a real question mark over the turnaround.

Coles numbers were also depressed by deflation which knocked one per cent off the numbers.

This shows the retailer is continuing to cut prices to meet competition.

The figures are good news for consumers with a more competitive market delivering value for shoppers.

Woolies boss Brad Banducci has taken a higher profile in recent days, which suggests he is confident about the numbers coming out later this week.

Coles concedes there has been a big change in the market which has become more competitive.

The numbers sent Wesfarmers stock price down 3.5 per cent in early trade to $42.35 a share, while Woolies lost early momentum to be down slightly at $25.21 in a down market.

The more subdued figures also tell you the overall economy is not great.