A new report has offered an updated comparison of Australia's supermarket giants Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).
Greg Burke, Equity Strategist at Canaccord Genuity said these supermarkets have demonstrated resilience against an incrementally more challenging consumer backdrop, amidst persistent inflation and a tightening RBA.
Both companies delivered early 2H26 trading updates showing accelerating top-line growth, outperforming most of the broader retail cohort where growth has generally moderated.
In addition, both supermarkets are demonstrating strong cost discipline, amidst their respective cost-out programs, which has supported impressive operating leverage, driving double-digit EBIT growth in 1H26 (WOW +14.4%, COL +10.2%).
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Earnings snapshot for Coles and Woolworths
Coles released half-year results on February 27.
Highlights from the report included:
- Group sales revenue: $23.6 billion, up 2.5% on the prior period
- Net profit after tax (excluding significant items): $676 million, up 12.5%
- Group EBIT (excluding significant items): $1,231 million, up 10.2%
- Interim dividend: 41 cents per share, fully franked.
Coles shares are down 0.33% since the start of 2026, although the share price has faced volatility.
Woolworths released half-year results on February 25 which included:
- Half-year sales of $37.14 billion, up 3.4% year on year
- Earnings before interest and tax (EBIT) of $1.66 billion, up 14.4%
- Net profit after tax (NPAT) up 16.4% year on year to $859 million
- Fully-franked interim dividend of 45 cents per share, up 15.4% from last year's interim payout.
Woolworths shares have rocketed on the back of these results, and now sit 22% higher than the start of 2026.
It closed yesterday at $35.92.
This marks a sharp turnaround since October last year when Woolworths shares were trading around $26 per share.
Which is a better buy?
According to Canaccord Genuity, Woolworths' ability to regain sales leadership over Coles was a notable theme.
This was particularly evident in WOW's 2H26 trading update, with its top-line growth accelerating to 5.8% (7.2% ex-tobacco), compared with COL at +3.7% (+5.3% ex-tobacco), implying market share gains for the market leader.
Mr Burke said Woolworth's strong result suggests it is beginning to reap the rewards of its turnaround strategy, which is focused on improving its consumer value proposition through disciplined investments into price, range optimisation and loyalty.
With WOW delivering consensus EPS upgrades of +5% (compared with modest downgrades for COL), we are increasingly confident that WOW's downgrade cycle has drawn to a close, solidifying our preference for WOW.
