Despite scrutiny from the government, Coles CEO Leah Weckert anticipates that more families will choose to stay home during the summer holidays as they manage tighter budgets due to rising mortgage rates and higher bills. To cater to these needs, Coles is putting a strong focus on its own-brand products, which Weckert describes as “more affordable alternatives to other products.”
“We’re showcasing around 400 home brand and exclusive drink products, most of which offer great value because they are our own brand and are more budget-friendly,” Weckert said in an interview on Thursday. “We’re also emphasising our loyalty programs, as about 40% of customers this year plan to use loyalty points to help manage their expenses.”
Coles, alongside its competitor Woolworths, faces significant scrutiny, with accusations from the Coalition and the Greens that both supermarkets are inflating prices. The Australian Competition and Consumer Commission (ACCC) has also raised concerns, alleging that both companies have engaged in misleading advertising by promoting discounts on products that were actually priced higher than before.
Weckert acknowledged that the trust and public perception of supermarkets have taken a hit over the past year following ACCC legal actions and several government inquiries into grocery pricing.
Calls from The Nationals and the Greens have emerged, urging the government to consider breaking up Woolworths and Coles if anti-competitive practices are found. This proposal has worried business groups, with the Business Council of Australia cautioning that such measures could drive up grocery prices and threaten job security.
In response, Weckert strongly defended Coles’ discounting approach. She emphasised that Coles strives to offer “genuine value, a genuine discount for the customer.” She added, “Customer trust is something we prioritise at Coles, especially now when cost-of-living pressures are so significant. Our ‘Down Down’ initiative allows us to collaborate with suppliers to provide longer-term discounts on food and groceries.”
As Coles and Woolworths gear up for the crucial summer holiday season, retail sales are beginning to show signs of recovery after two challenging years. According to the Australian Bureau of Statistics, sales turnover rose by 0.7% in August, resulting in a 3.1% year-on-year increase.
Expectations are high for the upcoming Black Friday and Cyber Monday sales in late November, with Australians projected to spend a record $6.7 billion—a 5.5% increase compared to last year, according to Roy Morgan. Additionally, food spending is expected to reach $28 billion during the six weeks leading up to Christmas, marking a 4.2% rise from last year.
Recent financial results indicate that Coles is outperforming Woolworths, which has seen slower sales growth since the beginning of the year. Other retailers are also hopeful that stable interest rates in the lead-up to Christmas will boost consumer spending and confidence.
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