The country’s second-largest supermarket chain is doing better than its bigger rival – from more stock on shelves to lower theft and better value. Here’s why.
Already a subscriber?Last week, Coles and Woolworths released their accounts. They confirmed what many suspected – that after years of dominance, Coles was outperforming its larger rival at a difficult time for supermarkets.
Coles has had a better year than Woolworths, but both major supermarkets face the prospect of regulatory action if a competition regulator-commissioned review finds they have too much market power.One measure of how customers see the two major supermarkets is Net Promoter Score. This looks at how happy shoppers are with prices, and how much value they feel they get from those stores.
Craig Woolford, an analyst at MST Marquee, says Coles has won more quarters, but the overall rate of sales growth is pretty evenly matched. For example, Woolworths’ sales in the three months to June 30 rose 2.2 per cent. At Coles, that was 2.6 per cent. In the six months to June 30, Coles sales rose 2.6 per cent against Woolworths’ 1.2 per cent.
Woolworths’ gross margins are also likely to moderate given the $90 million to $100 million in costs associated with supply chain upgrades this year and next, which the company hopes will lead to more growth in the long term. Again, customers will have more products available on shelves, and spending will go back to normal in 2027.Coles has gained nearly 20 per cent to $18.95, while Woolworths fell 5.4 per cent to $35.90 over the past 12 months.
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