The Coles Group Ltd (ASX: COL) share price is under the spotlight after the supermarket business announced its FY25 third quarter update.
Coles FY25 third quarter update
The supermarket business reported that for the 12 weeks to 30 March 2025, total sales grew by 3.4% to $10.4 billion.
Within that total, supermarket sales rose 3.7% to $9.4 billion and liquor sales rose 3.4% to $813 million. However, ‘other’ sales declined 9.3% to $165 million – this includes supplying products to Coles Express service stations.
Not much of the supermarket sales growth was driven by inflation – Coles reported an inflation rate of 1.5% for the quarter.
Impressively, Coles reported online sales growth of 25.7% to $1.06 billion, representing 11.3% of total sales, up from 9.3% in the prior corresponding period.
Coles’ CEO was pleased to deliver this growth, considering it was cycling very strong sales in the prior corresponding period. The sales performance also reflected the continued investments it’s making in value and “improving the shopping experience for customers” in-store and online.
The company also said this was the first quarter it was able to fully operate both its automated distribution centres and its customer fulfilment centres, improving efficiency and enhancing product availability. These facilities could be a boost for profitability and ultimately the Coles share price.
Trading update
Coles revealed that in the early part of the FY25 fourth quarter, the supermarket sales growth was “broadly in line” with the third quarter. Volume growth has been supported by a “positive response” from customers for its Easter offer.
In liquor it has continued to see positive sales growth, helped by its recent value campaigns and the addition of new space over the last 12 months, including its Tasmanian acquisition.
Management commentary
The Coles CEO Leah Weckert said:
With the ramp up of our second Automated Distribution Centre in New South Wales now complete, the ability to deliver a step change in online customer experience through our Customer Fulfilment Centres, and our Liquor banner simplification program underway, we enter the fourth quarter focused on delivering a great shopping experience for our customers underpinned by quality products at affordable prices.
Final thoughts on Coles shares
Coles has continued to deliver sales growth, which is a good sign. I think it has potential to keep growing sales, profit and the dividend. While it’s not cheap, I think it could be a good investment for the long-term.
