The Coles Group Ltd (ASX: COL) share price is slipping to the downside on Wednesday. This comes after the supermarket giant held its annual general meeting (AGM) this morning.
Both the company’s CEO and chair discussed how the second-largest retailer on the ASX navigated the perils of COVID-19 over the past year. From these lessons, management painted a picture of the vision for Coles in the year ahead.
At the time of writing, the Coles Group share price is trading at $17.61, down 0.4%. For context, the S&P/ASX 200 Index (ASX: XJO) is off by 0.3% near the end of trading.
Let’s take a look at what management shared with investors today.
Exiting the pandemic ‘a better business’
Addressing a mix of in-person and online attendees, Coles chair James Graham highlighted the amplified interruptions of COVID-19 during the year, saying the company had experienced 11 different lockdowns during the last financial year. In addition, a further 6 lockdowns have occurred in the first four months of this financial year.
To grasp the extent of disruptions to Coles directly, Graham said as many as 3,000 team members were in isolation at any one time. Despite this, the company managed to increase sales revenue by 3% during FY21, while net profits rose 7.5%. Further, during this period an additional 64 new stores were opened.
CEO and managing director Steven Cain added that in the process of navigating the erratic nature of pandemic, Coles has grown. He told the AGM, “In many ways, your company is exiting the pandemic a better business.”
Unfortunately, these positive statements have not managed to lead to a higher Coles share price today.
The AGM also heard Coles has adopted more technological approaches to business. One example of this was being the first mainstream Australian supermarket to abandon the delivery of door-to-door paper catalogues. While adopting a more digital approach, the catalogue removal also bolstered the company’s sustainability credentials.
Additionally, the ‘Smarter Selling’ program — which involves reducing $1 billion worth of costs by increased business efficiency — has now reached total cumulative savings of more than $550 million. Of this, approximately $300 million were realised in FY21 alone.
Speaking on the outlook for Coles, Cain said:
Looking ahead, as vaccination rates continue to rise across the country, we are optimistic on the outlook for the Christmas period as Australians adjust to life after lockdown and are once again able to enjoy time with family and friends.
Another win for customers, the company will include Bunnings and Officeworks as Flybuys partners from early December.
Coles share price snapshot
Despite the exuberance shared by management in the AGM today, the Coles share price has substantially underperformed the broader market over the past year. While the Aussie index has served up a 17% return in the prior 12 months, Coles has fallen 0.3%.