Coles has fallen behind its rival Woolworths at the start of fiscal 2027, with the supermarket giant ringing alarm bells for investors about the ongoing challenges it faces leading into Christmas.

The group grew its revenue by 2.2 per cent year-on-year to $11.2 billion. Its main supermarket segment grew by 2.7 per cent on a comparable basis.

Woolworths on Wednesday reported $19.4 billion in sales during the same period, up 4.7 per cent year-on-year. The ABS this week reported the nation’s annual headline inflation rate was 4.3 per cent in the 12 months to September.

Coles said customers remained “value-conscious”, shopping across multiple retailers and focusing more on promotions and loyalty programs.

E-commerce sales were Coles’ strongest-performing area, growing 22.9 per cent in the quarter. 

“During the quarter, we were encouraged by strong e-commerce growth, continued gains in Exclusive to Coles and progress across our capital investment program,” said Coles Group MD and CEO, Leah Weckert.

“While supermarket sales growth remained in line with the prior quarter, we know household budgets are under pressure, and customers are shopping more deliberately across retailers and channels.”

Going forward, Coles told investors that cost-of-living pressures remain a challenge for consumers. It also cited geopolitical uncertainty and higher fuel prices as the reasons behind an elevated cost forecast.

“There is more to do to ensure we are front of mind for customers in this environment, and we are taking action to sharpen our offer over the coming months,” Weckert added.

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