Australian supermarket rivals Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) have been in close competition for decades. The two supermarket shares dominate the Australian supermarket sector, and account for around 70% of market share combined.
They compete closely for grocery prices, customers, and supplier terms.
Here's the latest out of the two retailers, and what is expected next.
In my view, one is a buy and one is a sell.
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I'd buy Coles shares
Coles shares have climbed higher so far in 2026 off the back of stronger financial results, execution of its turnaround strategy, and higher sales figures.
At the time of writing, the shares are up around 12% for the year-to-date and are trading at $23.85 a piece.
The company posted its FY26 results last month, which included a 2.8% increase in its group sales revenue, a 9.9% increase in its EBIT excluding significant items, and a 13.7% increase in its NPAT excluding significant items.
Management also declared a fully-franked total dividend of 78 cents per share for FY26, an increase of 13%.
It looks like investors are pleased that the company's efforts have started to translate in better earnings.
And there are also more growth plans in the works.
Coles said it is ramping up its investment in new stores, renewals, and technology, including accelerated eCommerce and supply chain automation.
Most experts are positive about the outlook for Coles shares over the next 12 months.
According to TradingView, the majority of analysts (eight out of 17) have a buy/strong buy rating on Coles shares, and another seven rate Coles shares as a hold. Two experts have a sell/strong sell rating.
The average $24.46 target price implies a potential 3% upside over the next 12 months, at the time of writing.
I'd sell Woolworths shares
Woolworths shares have had a more stable run this year, versus Coles. The supermarket shares have mostly trended upwards and at the time of writing, are around 34% higher for the year-to-date.
It looks like the increase is mostly driven by investor confidence that the turnaround is coming to fruition. There is renewed investor confidence that the retailer's earnings are recovering after a difficult period in late 2025.
The ASX consumer staples stock gathered more attention after it posted its FY26 results last month.
The supermarket giant reported a 3.6% year-on-year boost in sales to $71.54 billion. And EBITDA (before significant items) increased by 6.7% to $6.09 billion. On the bottom line, Woolworths achieved a NPAT (before significant items) of $1.60 billion, up 15.4%.
The bumper results meant management was able to increase the final fully franked dividend by 15.6% from last year's final payout of 52 cents per share.
Investors were clearly pleased with the result, and the shares rallied to a new multi-year high shortly afterwards.
But it looks like the shares are now fully priced with little room for more upside.
Market experts agree. TradingView data shows the majority of analysts (nine out of 17) have a hold rating on Woolworths shares. But another six rate the shares as a sell/strong sell.
The average $39.71 target price implies a potential 1% upside over the next 12 months, at the time of writing.
