The outperformance of Coles Group Ltd (ASX: COL) shares over Woolworths Group Ltd (ASX: WOW) shares took a sharp turn in October.
Over the month just past the S&P/ASX 200 Index (ASX: XJO) closed up 0.4%.
Coles shares underperformed the benchmark, closing out September at $23.29 and finishing October at $22.05. This put the Coles share price down 5.3% over the month.
Woolworths shares enjoyed a much stronger performance.
On 30 September, Woolies stock closed at $26.70 a share. When the closing bell rang on 31 October, shares were changing hands for $28.41, up 6.4%.
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Why did Woolworths shares outpace Coles in October?
When looking at the relative performance of the two ASX 200 supermarket giants in October, we should first keep in mind the strong run that Coles has enjoyed over the past year while Woolies has struggled.
Here's what I mean.
Despite October's retrace, Coles shares remain up 24.3% since this time last year.
And despite October's welcome gains, Woolworths shares remain down 5.8% over the 12 months.
With that kind of divergence, it makes sense to see some reallocation between Australia's two dominant grocery chains.
The second thing to bear in mind is that both ASX 200 supermarket giants reported their September quarter (Q1 FY 2026) results in October. And investors responded quite differently to the two updates.
Coles shares dip on results
Part of the underperformance of Coles shares over rival Woolworths shares was spurred in the final days of October.
Coles shares closed down 2.6% amid high investor expectations after the company reported its Q1 results.
Highlights for the 13 weeks to 28 September included a 3.9% year-on-year increase in sales to $10.96 billion.
Coles digital offering showed particularly strong growth, with online supermarket sales up 27.9% from Q1 FY 2025.
However, both liquor and tobacco sales went backwards over the quarter. Coles reported a 1.1% year-on-year decline in its liquor sales, with tobacco sales plunging 57%.
Woolworths shares lift on results
Woolworths released its Q1 results on 29 October.
And investors sent Woolworths shares up 2.4% on the day after the company reported sales of $18.5 billion, up 2.7% year-on-year.
The company's W Living business saw a 3.3% sales boost to $1.39 billion in the September quarter. That was spurred by strong sale growth in its Petstock division and relatively flat performance from its struggling Big W business.
"While the Q1 sales performance was below our aspirations and there remains more to do, the changes we are making to improve value, convenience and availability are being recognised by our customers," Woolworths CEO Amanda Bardwell said on the day.
