Coles releases sales results as customers feel squeeze

Coles will report its third-quarter results as the supermarket sector feels the heat over high prices amid a cost of living crisis.

The results will be released to the ASX on Tuesday morning.

Coles and fellow supermarket giant Woolworths have faced heavy scrutiny after the companies raked in billion-dollar profits while Australian consumers struggle with rising prices.

Allegations of price gouging and unfair treatment of suppliers has resulted in political scrutiny including an at-times fiery grilling at a Senate inquiry.

Chief executive Leah Weckert conceded at a Canberra probe into supermarket prices that the chain needed to improve its relationships with suppliers, particularly with the horticultural sector, around greater price transparency for fresh produce.

“Coles would be very willing to be part of a solution that would involve greater transparency for fresh produce,” she said.

However, Ms Weckert in February defended Coles from allegations of price-gouging after the group reported a half-year profit of $594 million on sales of $19.8 billion, arguing its bottom line has been hit by the same cost pressures that affected customers.

Coles’ sales half-year revenue was up 6.8 per cent to $22.2 billion but its profit fell 3.6 per cent compared with the same period a year earlier.

Ms Weckert noted the result meant Coles made a profit of just $2.60 for every $100 that customers spent in its stores, a level that had been stable for the past five years.

“Profits are an essential thing for any business,” Ms Weckert told reporters.

“They enable us to continue to operate, and for us that means we get to employ 120,000 people.

“We get to support thousands of suppliers.

“We pay a very large tax bill every year - we’re in the top 100 taxpayers in Australia.

“And we pay dividends out to about 440,000 direct shareholders, 80 per cent of them own less than 2,000 shares.

“So they are mums and dads and families and retirees that are benefiting from those dividend payments.”

Food inflation had actually been lower in the past few years in Australia than it had been in other developed economies, Ms Weckert said.

It had been driven by things such as higher import costs, higher costs of fertiliser and higher costs of wheat, which spiked when Russia invaded Ukraine, Ms Weckert said.

She denied Australia had a supermarket duopoly or that the market was anti-competitive.

Coles also competed with global buyers such as Aldi, Costco and Amazon, as well as retailers such as Chemist Warehouse, Priceline and Bunnings, all of which stocked products that Coles sold, she said.