The Coles Group Ltd (ASX: COL) share price is in focus after announcing its FY26 third quarter update.
Coles is the second largest supermarket business in Australia, as well as having a liquor division (including Liquorland) and other businesses such as Flybuys.
FY26 third quarter performance
The business reported that in the 12 weeks to 29 March 2026, total sales grew by 3.1% to $10.7 billion.
Within that, supermarket sales increased by 4% to $9.8 billion, with comparable sales growth of 3.6%. Coles said that it achieved ‘above market’ growth in its supermarket division. Excluding tobacco, supermarket sales grew by 5.7%.
Supermarket e-commerce sales increased by 24.8% to $1.3 billion, with e-commerce penetration improving to 13.6%, up from 11.3% in the FY25 third-quarter.
Another positive was that ‘exclusive to Coles’ sales increased 7.3%, supported by ongoing innovation including 142 new product launches, a new Coles Kitchen salad range and a refresh of its Coles Simply range. Coles Finest sales rose 8.2%.
Pleasingly supermarket sales density per square metre improved 0.3% to $20,239, showing a level of sales growth at each existing supermarket.
There was total inflation of 0.8% excluding tobacco at the supermarkets.
Other divisions
Liquor sales declined by 3.9% to $781 million with a comparable sales decline of 4.3%.
Coles said that sales across its liquor convenience portfolio, representing 90% of its store network, remained resilient and broadly in line with the prior corresponding period. But, warehouse store sales experienced a “more pronounced impact”.
‘Other’ revenue dropped 14.5% to $141 million.
Outlook for the Coles share price
Coles said that in the early part of the fourth quarter, supermarket sales growth has remained “broadly in line” with the third quarter, adjusted for Easter and ANZAC timing effects.
But, with geopolitical tensions contributing to higher fuel and other commodity input prices, its focus remains on providing customers with good value.
In recent weeks, Coles has seen an increase in supplier cost price increase requests and higher costs within its own operations, particularly fuel, freight and packaging.
The company said it’s actively managing these impacts and will “mitigate impacts where possible, while balancing the needs of customers and suppliers”.
In liquor, sales continue to be impacted by weaker consumer confidence and there is a flow-on to liquor earnings.
In my view, I think the Coles share price is an attractive long-term buy because of how it provides significant exposure to Australian supermarket sales, more than its rival. It’s one of the blue-chip ASX dividend shares worth owning for the long-term.
