The Coles (ASX: COL) share price is rising after the supermarket business announced a large new deal.
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 International Deal
The Australian supermarket company announced that it has entered into a strategic partnership with UK supermarket business Sainsbury’s (J Sainsbury plc (LON: SBRY)).
Coles will utilise Sainsbury’s supply chain and will receive products to expand Coles’ Own Brand range.
Own Brand already represents 30% of sales at Coles Supermarkets. The first products sourced from this partnership will be added to Coles’ range in the second half of the financial year.
Coles Commercial and Express boss Greg Davis said: “We want to accelerate the introduction of innovative products to Coles Own Brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia.”
This is one of several ideas that Coles has made in recent times to improve its offering and try to win market share from Woolworths (ASX: WOW).
For example, Coles recently announced that it was launching a subscription service for food home delivery, it has made an agreement with Ocado so that the Australian supermarket company can gain access to Ocado’s Smart Platform technology and it also 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 and more efficient.
Coles said it would also work with its suppliers to explore opportunities to sell their products to Sansbury’s through the partnership.
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.