Coles is restructuring its health, beauty and home offerings after Chemist Warehouse, Amazon, Temu assault

Coles has begun the long task of refreshing its health, beauty and home aisles as it looks to claw back an estimated $400m in sales lost to non-supermarket rivals.

Coles is restructuring its health, beauty and home categories. Picture: Ian Waldie

Coles will retool its health, beauty and household categories as Australia’s second-biggest supermarket tries to claw back some of the estimated $400m in sales lost to a new generation of grocery rivals such as Chemist Warehouse, Amazon and Bunnings.

Suppliers serving these segments - from cosmetics and skin care to laundry liquid and cleaning products - have been asked to give Coles their promotional campaign plans as much as 12 months ahead of time.

This is expected to precede a long list of changes. Recently appointed general manager for health and home, Leanne White, said it was vital Coles introduced a “step change” into the way it manages these categories in an ever-broadening and competitive space.

This intensification of competition was reflected in the ranks of non-supermarket retailers such as Chemist Warehouse and Amazon now pitching health, beauty and home products to their customers.

Ms White conceded Coles had been deploying a strategy that didn’t fit the new dynamics of selling bathroom cabinet staples like sunscreen and laundry essentials.

“We have all been working with a real supermarket lens on how to execute our offer and potentially have not lifted our eyes enough on the broader market set,” she told suppliers.

“We have also lost sight of the importance of health and home,” she added. “The reality is we have stood still … we really, really need to lift our eyes.”

Coles has conceded it needs to do better in the health, beauty and home categories. Picture: Andrew Henshaw

Coles wants to get closer to these suppliers, and for that reason has requested their fiscal 2026 promotional calendars with maximum notice.

This will allow it to better map out its own campaigns for the year, and mitigate the threat of Chemist Warehouse, other pharmacy chains such as Wesfarmers’s Priceline, and online marketplaces like Temu, Amazon and eBay.

There is no specific timeline for implementing this enhanced planning approach.

“We see a significant opportunity to enhance our trade planning by working with our suppliers over a longer time horizon,” Ms White told The Australian.

“By moving towards a 9-12 month planning timeline, we create better opportunities for Coles, our suppliers, and ultimately, for our customers. Many of our suppliers are already adopting this best-practice approach, with this enhanced planning allowing us to be agile to customer trends.“

The new generation of retailers Coles is vying against traditionally have not played in the health, beauty and household space. But pharmacies expanded from just offering medicines and a limited range of grey market perfumes to whole fragrance aisles, hundreds of skin creams and a limited but cheap assortment of cleaning goods such as dishwasher tablets.

Wesfarmers’ Bunnings, traditionally a hardware chain, has ventured into cleaning products, pet care and automotive.

Coles believes the nation’s supermarket industry - led by itself and number one operator Woolworths - has lost as much as $500m in sales from the health, beauty and home products categories to a vanguard of new players. This includes revenue sacrificed by Aldi and the independents, too.

One of these players is the Chinese platform Temu which is particularly agressive in home decor and beauty.

Temu sells sink strainers for $1.98 and electric toothbrush heads for $4.51 as part of its ultracheap offering.

Internal Coles analysis, obtained by The Australian, showed the supermarket giant’s lost market share is estimated to be $100m annually over the past four years – at least $400m.

The new Coles research pinpointed the health and home categories in the $120bn supermarket industry as being at the forefront of share exposed by these non-supermarket retailers and marketplaces.

The Australian has previously reported that Coles believes it can rake in an extra $1bn in incremental sales within health and home if it can work up and execute the right strategy, although it hasn’t set a timeline for that ambitious goal.

Not only are Woolworths and Coles fending off aggressive pricing and marketing from Chemist Warehouse, Bunnings and their imitators, but supermarkets are also grappling with the rise of subscription tier offers like Amazon’s Prime.

Originally published as Coles is restructuring its health, beauty and home offerings after Chemist Warehouse, Amazon, Temu assault