What happened to the Coles (ASX:COL) share price in 2021?

The Coles share price shed value in 2021 amid COVID-19 variables.

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The Coles Group Ltd  (ASX: COL) share price finished slightly in the red in 2021 amid Omicron COVID-19 disruptions.

Shares in the supermarket giant shed 1.1%, dropping from $18.14 a share to $17.94 during the calendar year. In contrast, the S&P/ASX 200 Index (ASX: XJO) gained 13% during the year.

Let’s take a look at what impacted investor sentiment in the company’s share price.

How did the Coles share price perform?

The Coles share price had a topsy-turvy year marked by its dramatic fall in February, a massive recovery to a yearly high in August, and more drama in September.

Early in the year, the Coles share price plummeted more than 17% between market close on 27 January and its yearly low of $15.33 on 26 February.

Despite promising financial results in February, management warned of potential sales declines in the second half of the year due to COVID-19 uncertainties. Coles reported a 14.5% spike in net profit to $560 million in these half-year results.

Between 12 July and 23 August, the supermarket’s shares surged more than 13% to a 52-week high of $18.84.

During this time, Goldman Sachs forecast strong dividend growth for Coles in FY2021 and FY2022.

As my Foolish colleague Tristan reported on 23 July, ASX supermarket shares, including Coles, performed well during Australia’s lockdowns.

In August, The company also released promising financial results, showing sales revenue increased 3.1% to $38.6 billion.

Then, between market close on 23 August and 28 September, the Coles share price collapsed more than 12%. A broker note from UBS placed a sell rating on the company. Also, during this time, the retailer replaced existing debt facilities with sustainability-linked loans worth $1.3 billion. An end to lockdowns also weighed on investors’ minds.

A recovery was now on the cards. In between market close on 28 September and 23 November, the share price soared more than 10%.

Positive first-quarter sales results showing a 48% boost in eCommerce sales in the first quarter of FY22 was a highlight during this time. At its AGM, the company also highlighted some of its technological advances improving its business.

Finally, to end the year, between market close on 23 November and 31 December, the Coles share price shed 1.54%. In what was the only market announcement in December, Coles informed the market the Fair Work Ombudsman was investigating the company’s pay arrangements.

Also, news from Coles’ supermarket competitor Woolworths that its first half of FY22 was “one of the most challenging in recent memory” may have weighed on the minds of investors.

Foolish takeaway

The Coles share price performed roughly 14 percentage points below the benchmark index in 2021.

In the past month, the company’s shares are down 6.77%, and 7.19% lower in the past week. Omicron fears seem to be weighing on investors’ minds in recent days, with supply shortages prompting the company to warn of challenges in the next few weeks. The Coles share price dropped 2.46% on Tuesday.

The supermarket giant has a market capitalisation of roughly $22.2 billion based on its current share price.

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.

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