Why is the Coles (ASX:COL) share price sinking 4% today?

Could this be what’s weighing on the Coles share price today?

| More on:
a woman ponders products on a supermarket shelf while holding a tin in one hand and holding her chin with the other.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It’s a rough day on the ASX for the Coles Group Ltd (ASX: COL) share price despite the company’s silence.

However, fellow Australian supermarket giant, Woolworths Group Ltd (ASX: WOW) released potentially disappointing news to the market this morning.

At the time of writing, the Coles share price is $17.20, down 3.75% from its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 0.22% while the share price of Woolworths has tumbled 8.65%.

Let’s take a look at the news that might be weighing on Coles’ stock this morning.

Coles share price slips amid competitor’s woes

It’s a rough day for the Coles share price after its rival released a worrying trading update that might have inspired a drop in confidence in ASX-listed supermarkets.

This morning, Woolworths updated the market on its performance for the first half of financial year 2022. Within its release, its CEO said that the period’s been “one of the most challenging halves … experienced in recent memory”.

The company stated that it’s had a lacklustre performance due to the impacts of COVID-19‘s Delta strain.

Woolworths has been hit with direct and indirect costs due to COVID-19 outbreaks in the half. Particularly, as the outbreaks caused its supply chain to struggle.  

The disruption to stores and distribution centres has resulted in costs of between $60 million and $70 million over the 6-month period.

Though, its customers’ spending patterns began to normalise when lockdowns in New South Wales and Victoria eased in October.

The market might be assuming Coles experienced the same challenges during the first half.

Some COVID-19-related impacts on Coles’ business were included in its results for the first quarter of this financial year.

The supermarket reported it had footed around $75 million of costs associated with employees needing to isolate, extra staff to ensure check-in compliance and lower productivity.

The Coles share price gained 0.12% on the back of the company’s most recent quarterly results. However, it has fallen 7% since the start of 2021.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Retail Shares

A child pulls a very sad crying face sitting in the child seat of a supermarket trolley in a supermarket aisle lined with grocery items.
Retail Shares

What’s the outlook for Wesfarmers shares in July?

As the cost of goods and services increases, consumers supposedly have less disposable income to spend on discretionary items.

Read more »

Three happy shoppers.
Retail Shares

Embattled ASX 200 retail shares primed for a comeback: experts

Brokers are tipping a brighter future for some retail shares...

Read more »

Two women shoppers smile as they look at a pair of earrings in a costume jewellery store with a selection of large, colourful necklaces made of beads lined up on a display shelf next to them.
Dividend Investing

Here’s why I think Lovisa could be a top ASX dividend share

This retail ASX share could provide good dividend income for investors.

Read more »

a pile of colourful trainer shoes and sandshoes fashioned to look like a large shoe.
Retail Shares

What is the current dividend yield for Accent shares?

What kinds of dividends is Accent Group paying these days?

Read more »

A woman sets flowers on a side table in a beautifully furnished bedroom.
Broker Notes

Is the Adairs share price outlook brightening for July?

Should investors make a home for Adairs shares in their portfolio in July?

Read more »

Sad shopper sitting down with five shopping bags.
Retail Shares

ASX 200 retail shares in the doldrums today despite improving sales data

Despite another monthly uptick in sales figures, retailers are under pressure on the ASX today.

Read more »

Sad shopper sitting down with five shopping bags.
Retail Shares

What impacted ASX 200 retail shares this week?

With consumer confidence down substantially, one top broker has cut its share price targets for several ASX retail shares.

Read more »

Happy couple doing online shopping.
Retail Shares

Why is the Temple and Webster share price surging 11% higher today?

The ASX retail share has strengthened this week, but there's a long way to go.

Read more »