The Coles Group Ltd (ASX: COL) share price is down 12% after the company announced its FY27 first quarter update.
Coles’ main two businesses are Coles supermarkets and liquor stores (Liquorland and Coles Liquor).
FY27 first quarter sales growth
In the 13 weeks to 27 September 2026, the company reported that total revenue rose by 2.2% to $11.2 billion.
Within that total, supermarket revenue grew 3.6% to $10.3 billion (with comparable growth of 2.7%). E-commerce sales soared 22.9% to $1.6 billion, with e-commerce penetration increasing to 15.7% (up from 13.3%). Exclusive to Coles sales increased 4.3%, with more than 80 new own brand products launched. Coles Finest sales grew by 13.3%.
Coles reported that its supermarket inflation excluding tobacco was 1%.
Liquor revenue declined 1.3% to $831 million (with a comparable sales decline of 1.3%). Coles noted that its liquor convenience portfolio, with its warehouse portfolio showing early signs of improvement.
Other revenue fell 62.8%, which refers to its supply agreement with Viva Energy Group Ltd (ASX: VEA), but that supply agreement expires in November 2026, so volumes are declining.
Coles also noted that its Flybuys swipe rate increased by 110 basis points (1.10%) and the points redemptions increased 16%.
Outlook for the Coles share price
The company said that cost-of-living pressures and elevated competitor promotional activity have continued to influence customer buying activity in the first four weeks of the second quarter.
Supermarket sales continue to grow but growth has “moderated” compared to the first quarter.
It has taken actions to help performance, with investments in value, including a recent relaunch of its every day price program.
Coles also noted higher fuel prices in the last two months and it expects to incur additional fuel-related costs in the first half of FY27 compared to the first half of FY26.
Supermarket EBIT (EBIT explained) for HY27 is expected to be in line with HY26.
Liquor revenue has declined at a similar pace to the FY27 first quarter,
Overall, while growth is slowing, I think the business can continue to deliver financial progress in the years ahead, so I think it’s good one to buy at this lower price.
