The Coles Group Ltd (ASX: COL) share price was on form again on Tuesday and continued its push higher.
In fact, the supermarket giant's shares finished the day 2.5% higher at a record high of $15.37. This means the Coles share price has now risen an impressive 31% since the start of the year.
Why is the Coles share price at a record-high?
There have been a number of catalysts for this strong share price gain this year.
One catalyst has been the company's positive performance in FY 2019. Over the 12 months Coles reported a 3.1% increase in full year group sales revenue (excluding Fuel and Hotels) to $35 billion. This was driven by sales revenue growth across Supermarkets, Liquor and Express, and led to the company posting a 5.4% increase in profit from ordinary activities after tax to $1,078.2 million.
Another catalyst was the return of rational competition in the supermarket industry. With the price war between Coles and rival Woolworths Group Ltd (ASX: WOW) appearing to be at an end, the outlook for both supermarkets has improved greatly.
But perhaps the biggest driver of its strong share price gain this year has been the unveiling of its refreshed strategy.
The refreshed strategy is aiming to deliver on the company's vision of becoming the most trusted retailer in Australia in order to grow long-term shareholder value.
There are three pillars: Inspire Customers through best value food and drink solutions to make lives easier; Smarter Selling through efficiency and pace of change; and Win Together with its team members, suppliers and communities.
The one pillar that really stands out is the Smarter Selling pillar. It has the potential to be a game-changer as it aims to deliver $1 billion in cumulative savings by FY 2023. This is expected to be achieved through initiatives including the use of technology to automate manual tasks and simplifying above-store roles to remove duplication.
Is it too late to invest?
Whilst I think Coles' shares are looking about fair value now, I would still class its shares as a buy if you plan on making a long-term investment.
This is because I believe the refreshed strategy will lead to solid earnings growth over the next five years, which could support strong total returns for investors.
