The Coles Group Ltd (ASX: COL) share price will be one to watch today following the release of its first quarter update.
How did Coles perform in the first quarter?
Coles has started FY 2020 in a positive fashion, recording a 1.8% increase in total group sales to $8,695 million.
Impressively, the Coles Supermarket segment recorded its 48th consecutive quarter of comparable sales growth. This was despite it cycling the hugely successful Little Shop promotion from the first quarter of FY 2019.
Supermarket sales grew 1.6% over the prior corresponding period to $7,705 million and 0.1% on a comparable basis. This was driven by the Little Shop 2 campaign, price inflation of 1.4%, strong online sales growth, and further Own Brands penetration.
Supporting this growth, the Liquor segment delivered a 3.5% lift in sales to $726 million and the Express segment posted a 3.1% increase in sales to $264 million. Sales were up 0.7% and 0.4%, respectively, on a comparable basis.
In respect to its Liquor segment, management advised that its sales performance was driven by a strong performance in First Choice. This was supported by the roll-out of the First Choice Liquor Market renewal program and contributions from Exclusive Liquor Brands.
Whereas the Express segment benefited from more competitive fuel pricing and the Little Shop 2 campaign. Interestingly, the segment experienced the first quarter of fuel volume growth in four years. Whilst Coles no longer benefits from fuel sales due to its arrangement with Viva Energy Group Ltd (ASX: VEA), the increased traffic helped drive Convenience sales growth.
Coles CEO Steven Cain said: “The refreshed strategy we set out to Win in Our Second Century has helped us to deliver a positive set of results for our first quarter. The increased sales momentum we are seeing in the second quarter demonstrates that the changes we are making to Inspire Customers are already making a difference.”
All eyes will now be on rival Woolworths Group Ltd (ASX: WOW) when it releases its numbers on Wednesday.
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