Hidden in the Coles Group Ltd's third quarter sales announcement is a decline in the the number of supermarket dockets being redeemed by consumers. Coles Express reported a sales decline of 7% - also attributed to lower average petrol prices, competitor activity and their ongoing store upgrades.
Those of you that appreciate the workings of a Retailer P&L will agree that at the very low net profit margins that petrol generates (1-2%), this is likely to significantly impact the overall profitability of the operation.
I wouldn't mind finding out whether this has also impacted average basket size at Coles as consumers see less value in upping the transaction to hit the $30 threshold.
It will be interesting to see whether the decreased usage in the redemption is occuring at Woolworths.
Jason Wenn
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