COVID-19 lockdowns send Coles online supermarket and liquor sales up in Q1

Australian supermarket giant Coles has reported its first-quarter results for the 2022 financial year, which showed that Australians returned to online shopping, mainly driven by extended COVID-19 lockdowns in New South Wales and Victoria.

Total sales for the period came in at a steady AU$9.76 billion, where its supermarkets business pitched in AU$8.62 billion and its liquor business AU$874 million. The remainder was made up by its express business.

Breaking that down further, supermarkets ecommerce sales, unsurprisingly, grew 48% with sales penetration of 9% and liquor ecommerce jumped 72% with a 4.5% sales penetration. These results were similar to the Q1 results reported by supermarket rival Woolworths on Wednesday.

“As a result of the lockdowns, there was a return to local shopping at the expense of shopping centres, as well as increased demand for ecommerce,” Coles said.

Coles said it also incurred COVID-19 costs of approximately AU$75 million in the first quarter with costs accelerating in August and September, largely due to the approximately 20,000 team members required to isolate in New South Wales and Victoria, additional door greeters to ensure QR code compliance in store, and lower productivity due to shift bubbles in distribution centres.

“As we embarked on our third year of strategy execution, the COVID-19 Delta strain presented significant challenges in the quarter, which are now beginning to ease as vaccination rates increase,” Coles Group CEO Steven Cain said.

Despite the disruptions during the quarter, the company confirmed it remains on track to deliver smarter selling benefits in excess of AU$200 million in FY22.

On Thursday, the supermarket giant also announced an extended partnership with Microsoft to develop Coles’ team member engagement platform.

To be built using Microsoft 365, the solution would be used as a single portal to help its 120,000-plus staff manage rosters and swap shifts, as well as access payslips, procedure and training manuals, and internal communications.

“We’ve listened to our team and worked with Microsoft to develop the new platform that will provide a simple, secure way to connect … [and] to do their jobs so well,” Coles central operations and transformation executive general manager Kevin Gunn says.

This latest agreement between Coles and Microsoft builds on an existing partnership that has seen the pair work together to build out Coles enterprise data platform and overhaul its store network and supply chain.