Coles sales surge despite pandemic, floods – but Covid costs $65 million

Coles Group weathered what it described as significant Covid and flood-related disruptions during the third quarter to post a 3.9-per-cent lift in sales to $9.295 billion.

The company said staff absenteeism related to isolation requirements during the Omicron outbreak led to “availability challenges and short-term impacts on Coles’ promotional program and disruptions to stores and distribution centres”.

Floods in South Australia caused “severe road and rail logistics disruptions into Western Australia, while flooding in NSW and Queensland saw the suspension of trading at 130 stores across its supermarket, liquor and convenience store networks. Twelve stores remained closed when the quarter ended on March 27.

Coles warned cost price inflation was impacting suppliers as raw materials costs rose, along with shipping and fuel costs.

The supermarket division recorded $8 billion in sales, also up by 3.9 per cent, while liquor division sales of $781 million were up by 2.9 per cent. The company’s Express c-store division saw a sales decline of 2.2 per cent to $269 million which the company says was related to Covid isolation and state Covid-19-related regulations.

E-commerce sales soared 45 per cent as people chose to – or were forced to – avoid shopping in stores and the company invested in expanding its digital infrastructure and services.

“Traffic flows increased with workers returning to offices and children returning to school later in the quarter which was partially offset by the flood events and global fuel price increases.”

The company said it incurred around $65 million of Covid-19-related costs during the quarter, peaking at $30 million in January as requirements for team members to isolate in stores and warehouses, “the operation of shift bubbles and costs associated with administering rapid antigen testing in distribution centres”.


Extracted from Inside Retail

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