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Fifteenth quarter of growth for Coles

Wesfarmers Limited, owner of Coles, has released its second quarter retail sales figures, with the supermarket chain experiencing steady growth in food and liquor sales.

Coles, Bunnings and Kmart, in particular, have delivered a "solid performance", Wesfarmers said in a statement released eariler this week, with the retail businesses boasting a record number of shoppers in-store over the Christmas period – Coles alone made almost $1b in sales in the week leading up to Christmas.

Managing director at Wesfarmers, Richard Goyder, said "Coles’ comparable food and liquor sales growth of 3.8 percent for the half was reflective of the ongoing improvement in the quality, service and value of the customer offer. The December quarter represented the fifteenth consecutive quarter of growth in comparable sales and sales density."

Headline food and liquor sales for the second quarter of 2013 were $7.7 billion, up five percent on the corresponding period in 2012, while headline sales in the first half also increased by five percent, to $14.3 billion.

"Food and liquor price deflation moderated to 0.9 percent for the second quarter reflecting lower fresh produce deflation," the report reads.

It also states that Coles' continued invest in lower prices has driven volume growth ahead of sales growth. This comes after an announcement earlier this month that the supermarket giant would be expanding its Down Down range with the addition of more than 100 products.

Coles managing director, Ian McLeod said the company's commitment to improving quality, service and value has attracted more customers in-store and continues to benefit suppliers through increased volumes.

However after announcing the expansion of its Down Down range, the Australian Food and Grocery Council (AFGC) slammed Coles for limiting its product range.

Criticism surrounded findings in a report released by Coles, conducted by Deloitte Access Economics, which found that Coles' product range had dropped 11 percent from 2010 to mid-2012.

AFGC's chief, Gary Dawson said "These figures confirm what shoppers report anecdotally – that they often can’t find their favourite products on the shelves any more when they go to the major supermarkets.

"The latest aggressive campaign by Coles to promote their private label products is a sign that this trend will continue."

Coles responded quickly with its own statement, claiming that the AFGC "has selectively used data from a Deloitte report to pursue a tired political campaign against the major supermarkets."

Coles opened 10 new supermarkets and closed four stores during the second quarter, taking the total number of stores to 753. The total number of liquor stores and hotels sits at 895 after the company opened 20 liquor stores, closed five and opened one hotel.

The liquor market is an area of growth for Coles, who together with its key competitor Woolworths are said to be interested in the purchase of the Ultimo Wine Centre in Sydney, which has an annual turnover of more than $4m.

 

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