The Coles Group Ltd (ASX: COL) share price has been having a great week on the ASX despite no news having been released by the company.
The Coles share price has gained 2.9% since the start of the week. Coles shares are currently trading for $18.05 apiece.
While it’s unclear what’s been driving Coles’ stock higher, it might be due to additional COVID-19 lockdowns having been put in place across Australia.
Let’s take a closer look at the Coles share price’s upwards momentum.
Does Coles profit from lockdowns?
The Coles share price has been gaining this week while lockdowns have hit southeast Queensland and Sydney’s ongoing lockdown has no end in sight.
Additionally, South Australia and Victoria have had lockdowns implemented and eased over the past 30 days.
Historically, Coles – and other food retailers – have profited off lockdowns.
As the latest retail data from the Australian Bureau of Statistics (ABS) confirms, Australians spend more on food when they’re locked down.
Food retailing was the only industry to see its turnover rise in June, increasing by 1.5%. The ABS said states entering lockdowns drove the increase.
Additionally, in Coles’ results for the first half of the 2021 financial year, the supermarket giant reported its cash flow increased because of Victoria’s extended lockdown.
However, the market didn’t react positively to Coles’ half year report. The Coles share price fell 10% over the two sessions following its release.
Over the first half, Coles received a 52% boost to its e-commerce business, driven mostly by home delivery orders from locked-down Victorians.
The Victorian lockdown also caused a reduction in road traffic, making Coles’ home delivery system more efficient.
Coles’ liquor segment also saw its e-commerce trade increase by 90% over the first half of the 2021 financial year. Liquor sales tapered off during the second quarter of the financial year as lockdowns and restrictions around the country eased.
Whether the current lockdowns have re-established these trends is yet to be seen.
It’s unlikely lockdown-driven increases will be a part of Coles’ annual results, due to drop on 18 August. That’s because Sydney’s lockdown didn’t begin until late June.
However, Coles’ results for the current quarter might make for an interesting read.
Coles share price snapshot
The Coles share price is having a good run lately.
It’s gained 7.8% over the last 30 days. However, it is currently 2.3% lower than it was at the start of 2021. It has also fallen 4% since this time last year.