Coles expects strong Christmas trading as Australians return to drinking and eating together following lockdowns

Chief executive Steven Cain believes we will learn to live and work alongside Covid with Australians ready to celebrate Christmas, which should drive food and drink sales.

Coles CEO Steven Cain is expecting a strong Christmas as we learn to live alongside Covid-19 and celebrate with family and friends over the holiday season. Picture: Getty Images

Coles boss Steven Cain remains optimistic on Christmas trading as vaccination rates increase and people begin to socialise again around the dinner table, and expects its supermarket chain to emerge from the pandemic a better business.

“Looking ahead, as vaccination rates continue to rise across the country, we are optimistic on the outlook for the Christmas period as Australians adjust to life after lockdown and are once again able to enjoy time with family and friends,” Mr Cain told shareholders at its annual general meeting on Wednesday.

Mr Cain said while 2022 will be the third financial year in which the pandemic will exert an influence on its supermarkets, liquor and convenience store businesses and the lives of Australians, the nation is moving into a new era of Covid normal.

“One in which we live and work alongside the virus in the community.”

Coles knew all too well the disruptions caused by Covid-19 as through the year thousands of its staff were forced into isolation due to exposures at stores.

“The current Delta strain has undoubtedly been the most disruptive period for everyone in the industry – from our thousands of suppliers to the more than 20,000 team members we have had in isolation.

“As customers, you will have seen the significant changes we have made in our stores in order to provide a safe environment in which to work and shop. It has become somewhat second nature for many of us that the weekly shop starts by pulling on a mask, scanning a QR code at the door, and sanitising.

“Behind all of this is our supply chain team, who have also transformed their ways of working, including using shift bubbles and rapid antigen tests to ensure they remain safe and can keep our stores replenished.”

Mr Cain told shareholders since the vaccine became available, the company has encouraged all of its team members to be vaccinated against Covid-19 as soon as they can, subject to health advice.

“We have been delighted with the uptake of the vaccine by our team members, with more than 70 per cent of team members across Victoria and NSW now fully vaccinated, and more than 94 per cent having had at least one dose.

“Coles will continue to work with health authorities and team members to strongly encourage the uptake of vaccination in Queensland, South Australia and Tasmania.

“I am pleased to say that alongside managing Covid, we have continued to execute our strategy while moving quickly to respond to changes in consumer demand and behaviour. In many ways your company is exiting the pandemic a better business.”

Turning to its financial performance, Mr Cain said in a year of continued disruption during which Coles was also cycling the escalated demand seen in the first few months of the pandemic in 2020, Coles not only increased annual revenue and earnings for all three operating divisions, but also that earnings growth exceeded revenue growth.

In the group’s trading update last month, Mr Cain said he was expecting “the best Christmas ever” as lockdowns are eased, borders come down and consumers with pent-up demand and savings prepare to unleash a spending spree over the holiday season.

Later in the AGM, Coles chairman James Graham defended a decision by the supermarket earlier this year to do away with its in-house butchers and revealed around two thirds of Coles butchers had decided to take redundancy while others had been retrained.

Mr Graham also spruiked the supermarket’s recent heavy focus on sustainability, such as the signing of renewable energy agreements and refinancing $1.3 billion od debt with green sustainability bonds, saying it was good for business.

“All shareholders will appreciate that since we reset our strategy in 2019 where we placed trust and value as the overarching ambition of everything we do, all shareholders will see that it is important we think about how we are going to deliver on that ambition. And sustainability is really a central part of doing so.”

Shares in Coles ended down 5 cents at $17.63.