Coles Local opens in Chatswood

Coles is opening a tailor-made supermarket – using the Coles Local format – that incorporates sustainability features and a product range personalised to meet the needs of the Chatswood community on Sydney’s North Shore.

The store is part of an expansion of the Coles Local format in Sydney, following the  launch of the concept in Rose Bay in May – with Manly set to welcome a new Local store to the neighbourhood later this year.

Coles Local Chatswood has a range of refillable ecostore shampoos, conditioners, body washes, and laundry liquids available for customers through a new in-store refill station using bottles made from recycled and sugarcane plastic, eliminating the need for single-use bottles.

The store features more than 200 plant-based food products, ice cream just for dogs, a premium coffee and orange juice station, a macaron, mini gelato and Japanese mochi ice cream parlour, and a dedicated aisle with the largest Asian range in the country.

Coles’ chief sustainability, property and export officer Thinus Keevé, said each Coles Local supermarket is tailored to the specific needs of the local community.

“Coles Local Chatswood is a brand-new neighbourhood supermarket destination with new products sourced from 35 small Sydney suppliers, and innovative features that customers may not have seen before,” he said.

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“As we make progress on our mission to be Australia’s most sustainable supermarket, we’re increasingly looking at new and inventive ways to reduce packaging on certain products.

“This new ecostore station is a first for an Australian supermarket, which we hope will resonate well with customers.”

Ecostore managing director, Pablo Kraus, said this was the first time the company had installed a refill station in an Australian supermarket to help reduce packaging waste.

“People are used to bringing in their reusable supermarket bags; now they can also bring in their reusable ecostore refill bottles to conveniently refill their home and personal care products at the supermarket.”

Supporting a sustainable circular economy, the trolleys at the store are made from recycled plastic milk bottles and REDcycle plastics, free recycled carry boxes are available in place of bags, unsold food that cannot be donated to food charities is diverted to organic composting and green energy generation, and team member name tags and uniforms also feature part-recycled materials.

How the refill station works:

The Refill Station has been designed with an easy four-step process:

  1. Customers choose a small or large ecostore refill bottle
  2. Select the product and apply the matching sticker
  3. Refill the bottle by positioning the bottle under the tap or pump, and fill to the top
  4. Purchase by taking the bottle to the checkou

Coles boosts company revenue with investment

Coles’ has reported profit growth for the first time in four years. Net profit from continuing operations rose 7.1 per cent to $951 million. Coles credits its performance to pop-up distribution centres, stock replenishment system and advanced data analytics.

In its full-year sales report released on Tuesday August 18, Coles reported full year sales revenue increased by 6.9 per cent to $37.4 billion with sales revenue growth across all segments.

Coles Group earnings before interest and tax (EBIT) achieved growth for the first time in four years, increasing by 4.7 per cent to $1.76 billion.

Sales at Coles’ supermarket sector was up 6.8 per cent to $33 billion for the full year, with comparable sales growth of 5.9 per cent.

“Coles supply chain performed well despite the extraordinary strains of increased demand for pantry and ambient lines during the panic buying period,” the Group stated in the results.

“This performance was helped by recent investment in capacity, including pop-up distribution centres, but also the integrated stock replenishment system and advanced data analytics to improve availability.”

In the fourth quarter, COVID-19 factors continued to have an impact on both the level and mix of supermarket sales. Following a subdued and socially distanced Easter, sales improved as a result of increased in-home consumption.

Coles stated the fourth quarter also brought continuing higher COVID-19 related operating costs of approximately $170 million due to the one-off thank you payment to team members in stores and distribution centres, extra safety cleaning costs and supermarket greeters.

“The incremental costs also include operating the pop-up distribution centres and costs incurred following positive COVID-19 cases in the Laverton distribution centre in the last week of the financial year,” the Group stated.

Steven Cain, Coles Group CEO, said unforeseen challenges including drought, devastating bushfires, and the ongoing COVID-19 global pandemic has “provided the greatest test of our lifetime”.

“We are experiencing things we never thought we would see in a supermarket, or for that matter Australia. Coles for its part has become a designated essential service,” he said.

“We have successfully executed the first year of our strategic plan, restored group profit growth for the first time in four years, and are on track to grow long-term shareholder value. The interim and final dividend payments totalling $767 million importantly benefit millions of Australians.”

COLES ONLINE DURING COVID-19

Coles Online sales revenue grew by 18.1 per cent for the year after services were temporarily disrupted in March and April during the COVID-19 pandemic.

Investing heavily in Online throughout the year, Coles is expanding capacity in Home Delivery, largely through extended pick times and the recruitment of additional drivers. Click & Collect capacity was predominantly delivered through the expansion of contactless Click & Collect.

The Group stated that using advanced data analytics to ensure the right product was offered in the right store took place across the majority of categories and on a more regular basis, capturing the latest innovation in the market in areas such as ready meals, health foods, coffee and pet food.

“Coles continued to optimise the network as part of its tailored store format strategy with 70 store renewals completed during the year, representing the biggest renewal program since 2012.”

Coles’ optimised store network and formats is already transforming the make-up and performance of its extensive store network with plans to renew approximately 65 stores and to open in the range of 15 to 20 new stores in FY21, including five stores that were delayed in FY20 due to COVID-19.

“Property, plant and equipment and equity investments remained relatively stable year on year, while property acquisitions moderated,” Coles stated.

At the end of the reporting period there were 824 Coles Supermarkets. For the year, eight new store openings and five closures were completed.

Leases have now been signed for the two Ocado sites in Sydney and Melbourne.

Development and construction of the Witron ambient automated distribution centres and the Ocado online fulfilment centres will continue next year and beyond.

Approximately $100 million of capital expenditure was also incurred in relation to the Witron ambient automated distribution centres with the Queensland distribution centre build commencing during the year.

Coles continued to optimise its property portfolio with a focus on redevelopment activities, in addition to the further divestment of recently developed assets to benefit from a strong Australian property market, resulting in a net property inflow of $167 million and in-line with guidance provided at the interim result. This contributed to net capital expenditure of $666 million for the year.

Gross operating capital expenditure is expected to be approximately $1 billion and includes increased investment on the Witron ambient automated distribution centres as the project enters its third year.

Coles also expects net property capex to be approximately $100 million in FY21 and incur incremental operating expenditure related to project implementation costs, as project activities peak in FY22 and FY23.

In FY22, Coles expects these costs to be up to $75 million. Further detail on these costs will be provided as the project progresses.

Woolworths and Coles dominate Australia’s $2.9 billion fresh bread market

Australia’s $2.9 billion fresh bread market is dominated by the two supermarket companies –Woolworths Group and Coles Group.

These companies represent a combined 51.9 per cent of the fresh bread market, according to the Roy Morgan results for the year to June 2018.

In total, supermarkets now comprise more than two-thirds of the entire fresh bread market with the remaining 31 per cent split between specialty bread shops including Bakers Delight, Brumby’s Bakery, and between delicatessens, milk bars, convenience store and other stores.

Over the past eight years there have been three stand-out performers in the fresh bread market.

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Roy Morgan CEO Michele Levine said although Woolworths and Coles had the majority of the fresh bread market for more than five years, the success of Bakers Delight and Aldi in growing market share showed there was space for nimble competitors.

“The dominance of Australia’s two supermarket giants Woolworths and Coles is well known, with the two now comprising over half the Australian markets for fresh food including fresh meat, fresh fruit and vegetables and fresh bread,” she said.

“Although the two clearly dominate Australia’s fresh bread market, the growth this decade has been led by Coles Group which has significantly increased its market share by 6.2 per cent to 25.3 per cent, while Woolworths is little changed with 26.6 per cent of the fresh bread market,” said Levine.

German supermarket chain Aldi has grown its market share by 3.1 per cent to 7.1 per cent and specialty bread shop Bakers Delight now has a market share of 13.6 per cent, up by 0.5 per cent from June 2010.

“There are two competitors in particular outside the ‘Big 2’ who have grown their share of the fresh bread market and they come from very different origins. Aldi has made a huge impression on the Australian marketplace since opening its first store just over 15 years ago,” said Levine.

“Aldi’s success has been built upon not only discount prices but also a reputation for reliability, meeting the needs of consumers and being honest about what it has to offer. Aldi has consistently rated as one of Australia’s most trustworthy brands including retaining its spot as Australia’s most trusted brand in this week’s Roy Morgan Net Trust Score survey for July,” she said.

Despite facing a resurgent Coles in recent years Woolworths has retained its title as Australia’s largest retailer of fresh bread capturing a market-leading 26.6 per cent of the fresh bread market.

Other outlets for fresh bread including IGA and other supermarkets as well as Brumby’s Bakery and other smaller bread shops and delicatessens, milk bars, convenience stores have also experienced declines in their share of the fresh bread market of 1 – 2.4 per cent.

These results are from the Roy Morgan Single Source survey of more than 50,000 people per annum, including more than 12,000 grocery buyers.

Roy Morgan recently analysed the state of the overall grocery market in Australia, which is valued at more than $100 billion per annum. The latest results show Woolworths and Aldi have been the two best performers in the last year with both gaining significant market share. Further analysis, including the shares of the major supermarkets of the overall fresh food market.

 

Supermarkets match customer donations dollar-to-dollar to help farmers

Supermarkets in Australia continue to provide farmers with help during the drought, including Coles with its pledge to match customer donations dollar-for-dollar.

Coles’ promise to match customer donations will go for the entire month of August, in order to help farming communities doing it tough due to drought conditions.

The combined donations raised at checkouts and matched by Coles will be provided to the Country Women’s Association to support drought-affected families, to help cover household expenses such as school expenses and food, medical, electricity and water bills.

Coles managing director John Durkan said customers wanted to do more to support families affected by drought.

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“For every donation no matter how big or small, our customers can be assured they will be making a difference to the rural communities experiencing hardship and distress,” said Durkan.

The matching donation  is in addition to $5 million already pledged in grants or interest-free loans from the Coles Nurture Fund for farmers who have a project which will help them to combat drought in the future.

Harris Farm Markets also announced it is matching donations dollar-to-dollar in August.

In a release, Tristan Harris, from Harris Farm Markets, said farmers deserved a fair grow and they needed people’s support in these trying times.

From the 2nd of August the supermarkets had donation boxes in all its shops collecting funds for rural aid, for four weeks.

Harris Farm Markets also had a cook-up at all stores in the first weekend of August, selling food for $5 with all proceeds helping provide hay and stock feed for drought-stricken farmers.

On the 11th of August, Woolworths donated all profits from sales in the fresh departments at its supermarkets to the Rural Aid Buy a Bale appeal.

It followed a $1.5 million donation from Woolworths, in July, aimed at supporting farmers impacted by the drought.