Sales up at Coles Liquor despite last quarter decline
Coles Liquor, owner of First Choice and Liquorland bottleshops, has seen revenue growth again this year but admitted that sales were down in its final quarter.
For the year to 27th June 2021, Coles Liquor revenues grew $3.5 billion, up from $3.3 billion in 2020, it told the ASX this morning. EBITDA grew 14 per cent to $276 million.
Full-year sales in the supermarket group’s liquor segment grew despite the elevated sales in the prior corresponding period due to the onset of COVID and national lockdowns in 2020.
“Growth was driven by strategic initiatives that resonated with customers and customers spending more time living and working at home during COVID-19,” it said.
However, Coles revealed that for the fourth quarter, Liquor sales revenue decreased by 6.5 per cent and comparable sales growth decreased by 7.1 per cent, taking into consideration the heightened results from last year when lockdowns were in full swing and venues were facing further restrictions. This has continued a trend recorded earlier in the year by both Coles and competitor Endeavour Group, which seems inevitable as venues begin to reopen, although under restrictions and snap lockdowns.
The results also contrast to concerns from lobbyists such as FARE declaring that alcohol consumption has remained “significantly” above pre-pandemic levels in states such as Victoria.
Coles Liquor did say that sales growth was driven by all categories and states, underpinned by a strong performance in ecommerce as well as spirits and RTDs at a category level.
As customers make a mass exodus to online shopping, Liquor eCommerce sales grew 79 per cent during the year, and 42 per cent in the final quarter suggesting that this method of consumer consumption was only set to increase despite sales levelling out.
Coles is also experimenting with new store formats, including a “Black & White” Liquorland and new First Choice Liquor Market formats, which now cover 79 per cent of the network, which will be part of the $1.4 billion in capital expenditure Coles spends this year. Coles now counts 929 stores across Australia.
For the first seven weeks of its 2021/22 year have remained strong as lockdowns continue, Coles said, with headline growth flat on last year but achieving growth of 19 per cent on a two-year basis.
Overall sales revenue for the Coles Group rose 3.1 per cent to $38.6 billion, and net profit after tax rose to $1.0 billion, up 7.5 per cent.