Coles food and liquor sales grew 6.3 per cent in the financial year, ended 30 June 2011, up from 5.0 per cent for the 2010 financial year, Wesfarmers Limited has announced today.

Wesfarmers, the publicly-listed parent company that owns Coles, Bunnings, Target and Kmart, announced an overall ‘solid’ retail performance, especially given the backdrop of declining consumer confidence, significant price deflation and the adverse weather conditions experienced during the past twelve months.

Coles Managing Director, Ian McLeod, said he was encouraged by the comparable sales growth figures of Coles, which he said was achieved through increased supermarket transactions and bigger basket spend.

Coles recorded food and liquor price deflation for the year of 1.6 per cent, despite the impact of floods on food price.

“Coles has developed a series of efficiency programs across the business, lowering our cost of doing business and creating a savings pool which we have used to re-invest in the form of lower prices, improved quality and better stores and service,” said McLeod.

“Our customers have responded positively to our ‘Down Down’ campaign to reduce shelf prices on the products they buy most against a backdrop of rising costs of living that has adversely affected consumer sentiment and industry sales.

“Coles has worked hard to reduce the total cost of the weekly shopping basket by cutting prices of staple grocery items, such as milk and bread, to offset the impact of floods on prices of fresh produce, including bananas and field tomatoes.

“Our supermarket renewal program continues at pace, with 38 supermarkets refurbished during the quarter, including our Emerald and Fairfield stores which had been closed since January as a result of the Queensland floods.”

Coles now has 144 refurbished stores in Australia, out of a total of 741.

McLeod said that the liquor market remains challenging given weaker discretionary spending.

“Despite the tough market conditions we experienced encouraging growth in our 1st Choice stores and intend to continue our investment in these larger formats as customer purchasing patterns change,” McLeod said.

Wesfarmers Managing Director Richard Goyder, “A highlight of the [Wesfarmers] result was the continuation of the strong sales momentum in Coles and Bunnings, building on strong results from the previous year.”

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