Coles FY25: $44.35B Sales and 24.4% Supermarkets eCommerce Surge

Strong Supermarkets Drive Group Growth

Coles Group Limited reported a solid set of full-year results for FY25, with group sales revenue increasing by 3.6% on a normalised basis to $44.35 billion. The supermarkets division was the clear growth engine, posting a 4.3% rise in sales revenue, supported by volume-led growth and a focus on value, quality, and availability. Notably, the supermarkets segment achieved an 11.6% increase in underlying EBITDA, reflecting operational efficiencies and successful customer engagement initiatives.

eCommerce sales in supermarkets surged by 24.4%, highlighting the effectiveness of Coles’ investments in digital platforms and automated fulfilment centres. The launch of two Customer Fulfilment Centres (CFCs) and the Kemps Creek Automated Distribution Centre (ADC) contributed to improved supply chain resilience and enhanced online customer experience.

Liquor Segment Faces Challenges Amid Restructuring

While the liquor division saw a modest 1.1% increase in sales revenue, underlying EBIT declined by 10.1% normalised, reflecting cost pressures and restructuring expenses related to the ongoing 'Simply Liquorland' banner simplification program. The initiative, which converted 52 stores by year-end, aims to streamline operations and improve customer experience, with early signs of positive sales and transaction growth.

eCommerce growth in liquor was a bright spot, with sales increasing 7.2% normalised, supported by key trade campaigns and an expanded on-demand channel. However, the overall liquor market remained subdued due to cost-of-living pressures affecting consumer behaviour.

Capital Investment and Cost Management

Coles continued to invest heavily in its infrastructure, with gross operating capital expenditure of $1.27 billion, focused on store renewals, new store openings, and digital transformation. The completion of the Kemps Creek ADC and two CFCs marked significant milestones, with the Victorian ADC under construction. These investments are expected to deliver ongoing operational benefits and support future growth.

The company’s Simplify and Save to Invest program delivered $327 million in benefits during FY25 and remains on track to achieve $1.5 billion over four years. Despite rising financing costs; up $99 million due to new debt issuances and lease liabilities; Coles maintained a strong balance sheet with a lease-adjusted leverage ratio of 2.6x and investment-grade credit ratings.

Outlook and Strategic Focus

Looking ahead to FY26, Coles expects continued sales momentum in supermarkets, with early trading showing a 4.9% increase in sales revenue (7.0% excluding tobacco). The company plans to open approximately 12 new supermarkets and 19 liquor stores, while closing a number of liquor outlets as part of network optimisation. Capital expenditure is forecast at around $1.2 billion, with ongoing investments in digital, supply chain, and store renewals.

CEO Leah Weckert emphasised the company’s commitment to delivering value, quality, and availability, alongside disciplined cost control and maximising the benefits of recent capital investments. The 'Simply Liquorland' program is expected to complete by the third quarter of FY26, incurring one-off costs of approximately $20 million but positioning the liquor business for improved operating leverage.