Coles Beats Woolworths In Sales Through Its Little Shop Promotion

  • Sep 27, 2018 AEST
  • Team Kalkine
Coles Beats Woolworths In Sales Through Its Little Shop Promotion
Wesfarmers Limited’s (ASX: WES), Coles’ Little shop promotion has successfully captured the attention of the Australian shoppers who are enjoying the swapping and sharing of their miniatures to create collectable communities across the country. Due to the extraordinary success of Little shop promotion and distribution of free reusable plastic bags, the company’s profit increased by 6 percent in the September quarter and the sales increased by 7 percent. In the September quarter the Coles Group sales grew faster than its competitor Woolworths for the first time in last two years. Coles' same-store supermarket sales increased by 7 per cent during the Little Shop campaign and free bag period, which lifted same-store sales over the three months ending September by 5% compared with 1.9 per cent in the previous quarter. Coles reduced the discounts on their various products like sauces, spreads, cheese, bottled water, biscuits, skin care products from approximately 31.3% to 27.7%. Due to the stronger sales and lower discounting, the EBIT of the company during the quarter increased by 6% ($11 million) which added $1 million to full year EBIT growth. Woolworth’s same-store sales growth slowed down in September quarter as compared to the sales growth of June quarter, but it is estimated that the shoppers who switched to Coles products due to Coles promotion strategy will switchback and the Coles sales will slowdown and Woolworths sales will gain the momentum going forward. Coles has witnessed an excellent start in FY2019 however continued investment is required to continue the momentum over next quarters.   Coles recently announced that the retirement of its Managing Director Mr. John Durkan and appointed Mr. Steve Cain as the new MD. The stronger sales and earnings by the Coles will help the parent company Wesfarmers Limited to seek shareholders approval for the $20 billion demerger of Coles in November 2018. It is estimated that this demerger will create a new top 30 company listed on ASX, with leading positions in supermarkets, liquor and convenience. Founded in the year 1914, Coles Group Limited is an Australian company which owns and operates retail stores in Australia. Mr. Steve Cain is the current Managing director of the company. The headquarter of the company is located in Level 5, Module 1 800 Toorak Road Hawthorn East Tooronga, Australia. On 23 November 2007, the company was acquired by Wesfarmers.

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