Eggs-traordinary demand: Coles sees surge in sales despite price hikes
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In these times of tightened belts and careful budgeting, Australian shoppers are becoming increasingly savvy about their supermarket choices.
With the cost of living on the rise, many are seeking out ways to stretch their dollars further without compromising on the quality and enjoyment of their meals.
Coles, one of the country's leading supermarket chains, has observed a trend among cost-conscious consumers: a particular product has emerged as the go-to staple for many Australian households.
Coles CEO Leah Weckert highlighted this trend after the company reported a $1.1 billion full-year profit on Tuesday, August 27.
Despite the financial pressures faced by many Australians, Coles has seen a profit increase of 2.1 per cent, while their revenue increased by 4.4 per cent to $43.6 billion for the twelve months leading up to July.
This growth has been accompanied by a slight increase in profit margins in supermarkets, which has raised concerns amidst the current economic climate, where many are grappling with rising costs for essentials like groceries, rent, fuel, and energy bills.
Ms Weckert noted that household financial pressure was ‘front of mind’.
However, she recognised that grocery prices contributed to the financial pressure, with rent, fuel, and energy bills also playing a significant role in customers tightening their budgets.
‘To minimise spend, customers continue to eat more at home, cut back on treats, eat less red meat and reduce their alcohol consumption,’ Ms Weckert suggested.
‘It’s no surprise that they are telling us great specials and promotions, competitively priced products, and loyalty programs are even more important when deciding where to shop.’
According to Ms Weckert, this frugality had contributed to the popularity of ‘meat-free Monday’, as customers opted for vegetarian meals to extend their wages.
The supermarket chain also reported a rise in sales of one of the most affordable protein sources.
Ms Weckert noted that eggs are now being purchased in larger quantities. Known for providing a hearty meal at a lower cost compared to other proteins, eggs have become even more essential.
The supermarket’s premium Coles Finest range saw a significant boost, with revenue increasing by 20 per cent in 2024, despite its higher price compared to other store brands.
This rise is likely due to shoppers, while reducing dining out expenses, still wanting to treat themselves with higher-quality items at home. Additionally, frozen foods have become more popular among shoppers.
Ms Weckert mentioned that it was challenging to forecast when Australians might start spending more freely again.
‘I think it’s hard to call because so much of it is embedded in what is the sense and belief of the consumer,’ she explained.
‘A lot of these behaviours are here to stay.’
Increasing supermarket profits are being scrutinised, with shoppers accusing major retailers of price gouging.
A recent inquiry by the Australian Council of Trade Unions into unfair pricing practices across various industries highlighted severe concerns about supermarket price inflation.
The report, released earlier this year, revealed that between March 2021 and September 2023, prices for items such as cheese, bread, milk, eggs, dairy products, and breakfast cereals rose by 19 to 27 per cent.
However, Ms Weckert noted that Coles' net profit after tax for the group, standing at 2.6 per cent, had hardly changed.
‘For every $100 the customer spends, we make $2.60,’ she pointed out.
The 2.6 per cent profit margin is in line with 2023 and lower than that of 2022.
‘There has not been an increase in our profit rate in this inflationary period,’ she added.
The company stated that payments to suppliers had risen by $2.4 billion, and wages had also increased.
When asked if Coles’ increasing earnings provided room to lower prices, Ms Weckert explained that redirecting all profits towards pricing would only result in a 3 per cent reduction.
In the supermarket division, margins increased from 4.8 per cent to 5.2 per cent, which could spark concerns about higher prices boosting profits.
However, Ms Weckert attributed the margin increase to cost-cutting measures and improved management of store theft and stock loss, issues that were more significant last year.
She also noted that ‘supermarket price inflation’ dropped to 2.5 per cent in the past year, down from 6.7 per cent the previous year.
As Coles sees a surge in the sales of budget-friendly staples like eggs, reflecting the current trend of cost-conscious shopping, many consumers are finding themselves increasingly frustrated with rising prices.
Despite the growing demand for affordable protein sources, recent reports highlight a troubling spike in the cost of a popular brand of eggs in Woolworths, a popular choice for many households.
This has sparked widespread outrage among shoppers, who are feeling the pinch as prices for this essential item continue to climb.
Have you also turned to eggs as a budget-friendly staple? What other cost-saving tips do you have for fellow shoppers? Share your thoughts and experiences in the comments below.
With the cost of living on the rise, many are seeking out ways to stretch their dollars further without compromising on the quality and enjoyment of their meals.
Coles, one of the country's leading supermarket chains, has observed a trend among cost-conscious consumers: a particular product has emerged as the go-to staple for many Australian households.
Coles CEO Leah Weckert highlighted this trend after the company reported a $1.1 billion full-year profit on Tuesday, August 27.
Despite the financial pressures faced by many Australians, Coles has seen a profit increase of 2.1 per cent, while their revenue increased by 4.4 per cent to $43.6 billion for the twelve months leading up to July.
This growth has been accompanied by a slight increase in profit margins in supermarkets, which has raised concerns amidst the current economic climate, where many are grappling with rising costs for essentials like groceries, rent, fuel, and energy bills.
Coles CEO Leah Weckert highlighted that financial pressures are influencing Australians' shopping habits. Credit: Shutterstock
Ms Weckert noted that household financial pressure was ‘front of mind’.
However, she recognised that grocery prices contributed to the financial pressure, with rent, fuel, and energy bills also playing a significant role in customers tightening their budgets.
‘To minimise spend, customers continue to eat more at home, cut back on treats, eat less red meat and reduce their alcohol consumption,’ Ms Weckert suggested.
‘It’s no surprise that they are telling us great specials and promotions, competitively priced products, and loyalty programs are even more important when deciding where to shop.’
According to Ms Weckert, this frugality had contributed to the popularity of ‘meat-free Monday’, as customers opted for vegetarian meals to extend their wages.
The supermarket chain also reported a rise in sales of one of the most affordable protein sources.
Ms Weckert noted that eggs are now being purchased in larger quantities. Known for providing a hearty meal at a lower cost compared to other proteins, eggs have become even more essential.
The supermarket’s premium Coles Finest range saw a significant boost, with revenue increasing by 20 per cent in 2024, despite its higher price compared to other store brands.
This rise is likely due to shoppers, while reducing dining out expenses, still wanting to treat themselves with higher-quality items at home. Additionally, frozen foods have become more popular among shoppers.
Ms Weckert mentioned that it was challenging to forecast when Australians might start spending more freely again.
‘I think it’s hard to call because so much of it is embedded in what is the sense and belief of the consumer,’ she explained.
‘A lot of these behaviours are here to stay.’
Increasing supermarket profits are being scrutinised, with shoppers accusing major retailers of price gouging.
A recent inquiry by the Australian Council of Trade Unions into unfair pricing practices across various industries highlighted severe concerns about supermarket price inflation.
The report, released earlier this year, revealed that between March 2021 and September 2023, prices for items such as cheese, bread, milk, eggs, dairy products, and breakfast cereals rose by 19 to 27 per cent.
However, Ms Weckert noted that Coles' net profit after tax for the group, standing at 2.6 per cent, had hardly changed.
‘For every $100 the customer spends, we make $2.60,’ she pointed out.
The 2.6 per cent profit margin is in line with 2023 and lower than that of 2022.
‘There has not been an increase in our profit rate in this inflationary period,’ she added.
The company stated that payments to suppliers had risen by $2.4 billion, and wages had also increased.
When asked if Coles’ increasing earnings provided room to lower prices, Ms Weckert explained that redirecting all profits towards pricing would only result in a 3 per cent reduction.
In the supermarket division, margins increased from 4.8 per cent to 5.2 per cent, which could spark concerns about higher prices boosting profits.
However, Ms Weckert attributed the margin increase to cost-cutting measures and improved management of store theft and stock loss, issues that were more significant last year.
She also noted that ‘supermarket price inflation’ dropped to 2.5 per cent in the past year, down from 6.7 per cent the previous year.
As Coles sees a surge in the sales of budget-friendly staples like eggs, reflecting the current trend of cost-conscious shopping, many consumers are finding themselves increasingly frustrated with rising prices.
Despite the growing demand for affordable protein sources, recent reports highlight a troubling spike in the cost of a popular brand of eggs in Woolworths, a popular choice for many households.
This has sparked widespread outrage among shoppers, who are feeling the pinch as prices for this essential item continue to climb.
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