Coles says there’s strong demand for its home brands as shoppers look for affordable treats

Coles boss Leah Weckert says the supermarket giant is harnessing the popularity of its premium private-label range as shoppers look for affordable treats and ways to recreate restaurant experiences at home.

While consumers were feeling more optimistic thanks to three rounds of interest rate cuts this year, Ms Weckert said they continued to keep value front of mind and were still cutting back on takeaways and treats, shopping across multiple stores, researching prices and using loyalty points.

She said cost-cutting behaviours have supported strong growth in its premium home-brand range Coles Finest, where sales outpaced the rest of the store in the 2025 financial year.

“We really think that’s customers trying to still treat themselves and have great meals, but they’re doing it at home and recreating more restaurant experiences,” she told The Nightly

“That is helping us to get customers into new categories that they haven’t shopped before, so for example in our freezer section we’ve got a fantastic range of canapes and frozen entertaining items, we’ve got things like a whole side of salmon that looks beautiful as a table centre-piece.”

Shares in Coles closed up 8.5 per cent to $22.50 on Tuesday after the company revealed full-year revenue hit $44.4 billion, up 3.6 per cent on a normalised basis accounting for an extra week of trade in 2024.

Sales at its 860 supermarket grew 4.3 per cent to $40b as shoppers respond to Coles’ value campaigns and focus on fewer, deeper promotions on everyday products.

Ms Weckert told media earlier on a call that customers were starting to feel more positive about the economy, driven by the Reserve Bank of Australia’s interest rate cuts.

“However, a lot of the behaviours that we’ve seen in the past like cutting back on meals and takeaways . . . is continuing to be in play,” she said.

“I think we’re seeing those green shoots around sentiment. The question is going to be, when do we start to see some of the behaviour change and catch up with that? And the timing on that is a bit unclear at this stage.”

Excluding tobacco, supermarket sales jumped by 5.7 per cent.

Coles noted a 30 per cent decline in tobacco sales as higher government excise — aimed at lowering smoking rates — fuels growth in the black market.

“Tobacco has been in double-digit decline for us now for a few years,” Ms Weckert said.

“We’ve been really focused on growing our other categories, so our food categories and our non-food categories, to help us to navigate through that decline in the tobacco category.”

The growth in supermarkets offset weaker sales in liquor, which is the midst of a simplification program that will see its Vintage Cellars and First Choice Liquor Market chains folded into the better-known Liquorland brand.

Liquor sales posted a modest 1.1 per cent growth to $3.7b as earnings slid.

“The liquor market remained subdued throughout the year with cost-of-living pressures continuing to influence customer behaviours,” Coles said.

“However, sales growth was supported by new stores, including our Tasmanian acquisition, strong trading across key events, including Christmas and Easter, and a positive response to increased tailoring of store ranges to cater for local demand, particularly in the wine category.”

Coles delivered a profit of $1.08b after tax, up 2.4 per cent on a normalised basis.

Underlying earnings before interest, tax, depreciation and amortisation was up 6.8 per cent to $2.22b.

In the first eight weeks of the new financial year, supermarkets sales grew by 4.9 per cent (7 per cent excluding tobacco), while liquor was flat.

Ms Weckert echoed warnings from bosses of other retailers this month about a growing crime racket confronting the sector.

“Despite all the investments that we’ve made in the loss technology, despite the investment that we’ve made in safety initiatives for our team, we are continuing to see increases in threatening situations in store,” she said.

Coles will pay a final fully franked dividend of 32¢ a share.