Coles posts $1.1 billion profit as meat and veggie prices drop

Save articles for later

Add articles to your saved list and come back to them any time.

Coles says the price of groceries is continuing to moderate and some fresh produce prices are falling as families are demanding better value offers from the big supermarkets.

The grocery giant revealed on Tuesday that its profits had increased by 4.8 per cent to $1.09 billion in the 12 moths to June 25, with sales inching up by 5.9 per cent to $40.5 billion. The result was just shy of market expectations, with analysts predicting a $1.1 billion profit.

The 2023 financial results are the first to be presented by newly appointed Coles boss Leah Weckert.Credit: Eamon Gallagher

Price inflation across the group’s supermarkets came in at 6.7 per cent for the year, but the company said inflation was slowing, with prices increasing by 5.8 per cent in the June quarter.

Cucumbers, broccoli and capsicum are among the key fresh products that are decreasing in price, while the affordability of red meat is also improving, the company said.

The most recent quarterly data from the Australian Bureau of Statistics put food and non-alcoholic beverage inflation at 7.5 per cent for the June quarter, compared with the same period in 2022.

In her first full-year results as Coles’ chief executive, Leah Weckert said consumers were demanding more from supermarkets as their budgets become more stretched.

“They are looking to the supermarket to help them do more for their budget,” she said. “Across the board, customers are economising in lots of different ways.”

Coles launched its new automated distribution centre with tech partner Witron at Redbank, outside Brisbane, in April.Credit: Dan Peled

She said young families and those under the age of 34 were among those working hardest to reduce their spending. The company is now seeing signs that consumers are shifting from eating out to making meals at home.

“Eating out, take away and coffees from the café are increasingly being seen as treats,” Weckert said in a call with media on Tuesday morning.

Coles investors will receive a fully-franked final dividend of 30 cents a share, bringing the full-year payout to 66 cents per share, a 4.7 per cent increase on last year.

Coles shares are up 4.7 per cent year-to-date, having closed at $17.23 on Monday.

More to come.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Most Viewed in Business

From our partners

Source: Read Full Article