Highlights

  • Group sales Revenue rose 3.1% to $10,703 million in Q3 FY2026; Supermarkets comparable growth of 3.6% exceeded the market for a sustained period.
  • eCommerce sales grew 24.8% to $1,327 million, with penetration increasing 226 basis points to 13.6%.
  • Liquor segment sales declined 3.9% to $781 million, with comparable sales contracting 4.3% amid weak consumer sentiment.

Coles Group (ASX:COL) shares traded at AUD 22.04 on 1 May 2026, declining AUD 0.070, or 0.32%, during the session. The marginal pullback occurred despite the release of a broadly solid third-quarter sales report demonstrating continued Market Share gains in Supermarkets and outstanding eCommerce performance. The decline likely reflects investors weighing the emerging headwinds outlined in the company's outlook commentary — rising cost pressures, heightened geopolitical uncertainty, and a deteriorating Liquor segment — against the structural positives of the core Supermarkets Business. The result itself is, in the context of the challenging macro environment, a strong demonstration of operational resilience.

Group Sales Overview: Consistent Execution

Coles Group generated total sales Revenue of $10,703 million for the 12 weeks ending 29 March 2026, an increase of 3.1% from $10,379 million in the same period of the prior year. The Supermarkets segment dominated performance, delivering $9,781 million in Revenue — a 4.0% increase — while the Liquor segment contracted 3.9% to $781 million. The Other segment, which relates entirely to the Product Supply Agreement with Viva Energy Group, contributed $141 million, down 14.5% as the agreement approaches its scheduled expiry by end-November 2026.

Supermarkets comparable sales growth of 3.6% was described by the company as above-market, continuing a pattern of consistent Market Share gains over multiple years. Excluding the tobacco category — which faces secular Volume decline due to regulatory changes and shifting consumer behaviour — Supermarkets sales grew at an even stronger 5.7%. Price Inflation in Supermarkets moderated to just 0.8% in the quarter (down from 1.7% in Q2 FY2026), and fresh produce was in mild Deflation due to abundant seasonal Supply. This combination of Volume-led growth in a low-Inflation environment is exactly what the market would want to see from a defensive consumer staples retailer.

eCommerce: The Standout Performer

eCommerce sales emerged as the standout positive in the quarterly result. Revenue from online channels grew 24.8% to $1,327 million, and eCommerce penetration increased by 226 basis points to 13.6% of total Supermarkets sales. In March 2026, penetration reached 14.2% — a record monthly figure — driven by continued momentum across all fulfilment channels. The growth was supported by expanded partnerships, notably with Uber Eats, and by increasing customer adoption of home delivery, click-and-collect, and rapid delivery Options.

Flybuys active members grew 5% to 10.3 million, while Coles Plus and Coles Plus Saver subscriptions increased by 75%, as customers increasingly sought to maximise the value of their grocery spending through loyalty and subscription programmes. These membership numbers represent a significant and growing source of first-party data and customer engagement that strengthens Coles' competitive positioning against both traditional supermarket rivals and pure-play online grocers.

Supermarkets: Volume, Value and Own Brand

The driver of Supermarkets' above-market performance was a combination of value-focused merchandising and customer engagement initiatives. A broad everyday value range, targeted promotional activity, and campaigns including a Summer value promotion and the Shop. Scan. WIN! and KitchenAid cookware promotions all drove traffic and basket size. In March 2026, elevated Demand for pantry staples emerged as customers stocked up in response to geopolitical uncertainty in the Middle East — a pattern consistent with consumer behaviour observed globally during periods of uncertainty.

Own Brand performance remained a key driver of growth. Exclusive to Coles sales increased 7.3%, supported by 142 new product launches, a new Coles Kitchen salad range and a refresh of the Coles Simply range. Within the own Brand portfolio, Coles Finest — the premium tier — was the strongest-performing tier with Revenue up 8.2%, suggesting that even in a value-conscious environment, customers are willing to trade up within the Coles ecosystem when quality is demonstrated. The company completed 17 supermarket renewals and opened two new stores during the quarter.

Liquor: A Structural and Cyclical Challenge

The Liquor segment remained under pressure. Revenue declined 3.9% to $781 million, with comparable sales contracting 4.3% — a deterioration from the 2.0% comparable decline in the prior year period. While the convenience-format liquor portfolio (approximately 90% of the store network) held up broadly in line with the prior corresponding period, the Warehouse-format stores — which typically command higher spend-per-visit from committed shoppers — experienced a more pronounced contraction. Consumer sentiment weakened materially in March, compounded by heightened geopolitical uncertainty in the Middle East.

The company closed 14 stores and opened one new store during the quarter as part of its network rationalisation effort. Store renewals are contributing to improved customer satisfaction metrics. eCommerce within Liquor grew a modest 1.8%, with penetration of 7.4% (8.6% including liquor sold through Coles Online). Management flagged that the step-down in consumer sentiment observed in March is expected to have flow-on implications for Liquor segment Earnings in the second half, as reduced sales volumes dilute the Fixed Cost base.

Outlook: Value Remains the Battleground

Coles enters the fourth quarter of FY2026 navigating a more complex environment. Early Q4 Supermarkets trading has remained broadly in line with Q3 trends — a positive data point suggesting the quarter has not experienced a sudden deterioration. However, geopolitical tensions are contributing to higher fuel, Commodity input and supplier cost prices. Coles disclosed that it is receiving an increased Volume of supplier cost price increase requests, alongside higher internal costs in fuel, freight and packaging. Management stated it is actively working to mitigate these impacts while balancing the needs of both customers (who need value) and suppliers (who face genuine cost Inflation).

CEO Leah Weckert emphasised that the company is well-positioned to provide a compelling value proposition through its own Brand portfolio, leading eCommerce infrastructure, and Supply chain capabilities. The pattern of consumers eating at home more and eating out less — observed as a response to tighter budgets — is a structural tailwind for supermarket volumes, even if it creates Margin pressure from the need to absorb some supplier cost Inflation rather than pass it fully through.