The Coles Group Limited (ASX: COL) share price has gone up over 1% after announcing another tech agreement.
After 10 years being owned by Wesfarmers, Coles Group was split from the broader Wesfarmers conglomerate (which owns Bunnings Warehouse) in November 2018. However, the Coles name has operated in Australia for 100 years. Today Coles is one of the largest retailers in the country, serving 21 million customers per week across its supermarkets, Coles Express, Online, Vintage Choice and others.
Coles’ New Technology Agreement
Coles has signed another deal with technology business Accenture, which has a global strategic relationship with Microsoft and will leverage this relationship to help Coles’ operations become simpler, more efficient and robust according to the Australian Financial Review.
The idea is that Accenture will support key digital and technology changes at Coles including bringing the Coles supply chain up to speed as well as the implementation of SAP systems for procurement, human resources and finance.
If you remember, Coles has already signed a deal with Witron to create two new automated warehouses over the coming years. It has also signed a deal with Ocado for online sales. When combined with the Microsoft agreement to set up new Coles enterprise software, you can see that Coles is investing heavily in tech for the future.
The Australian Financial Review quoted Coles CEO Steven Cain, “We have committed to being technology-led in our stores and throughout our supply chain to reduce costs while delivering an even better shopping experience for customers and making life easier for our team members.
“The partnership with Accenture will enable us to deliver the efficiencies we need for long-term sustainability, and provide the agility to respond to rapidly-evolving consumer needs. This is a vital part of Coles winning in its second century.”
Accenture will also help Coles look at new tech applications for Coles including the creation of roadmaps that will ensure Coles’ digital capabilities keep on track with the company’s long term strategy.
Is Coles A Buy?
Coles is certainly making big strides with its technology, supply chain and in-store experience. However, the ultimate test will be whether it means sales and profit growth. With Coles’ share price trading so high, I’m not a buyer for what is a slow-growth business.
I think the reliable businesses in the free report below could be much better ideas over Coles.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.