Coles signs partnership with Accenture

Coles has signed a long-term agreement with global digital and technology services provider Accenture to support the rollout of new technology that will help Coles deliver cumulative cost savings of $1 billion over four years.

The agreement follows Coles’ recent announcement of a strategic partnership with global technology leader Microsoft to accelerate its digital transformation, using cloud-based innovation to transform the shopping experience for customers, make life easier for team members, and improve productivity across the business.

Accenture has delivered more than 35,000 Microsoft projects for more than 4,000 clients around the world and has a global strategic relationship with Microsoft that will be leveraged to help Coles deliver simpler, more efficient, and robust operations.

Accenture will also support key digital and technology development initiatives at Coles including the modernisation of Coles’ supply chain with global automation experts Witron and Ocado as well as the implementation of SAP systems for procurement, human resources, and finance.

Coles last month revealed plans to accelerate its use of technology as part of its Smarter Selling initiative, which will deliver $1 billion in cumulative cost savings by FY23.

“We have committed to being technology-led in our stores and throughout our supply chain to reduce costs while delivering an even better shopping experience for customers and making life easier for our team members,” Coles Chief Executive Officer Steven Cain said.

Smarter Selling will include increased automation of manual tasks both in stores and in support functions, faster checkouts, using artificial intelligence for quicker and more accurate stock ordering as well as reducing energy use, and smarter planning in distribution centres to improve availability.

“The partnership with Accenture will enable us to deliver the efficiencies we need for long-term sustainability, and provide the agility to respond to rapidly-evolving consumer needs. This is a vital part of Coles winning in its second century,” Mr Cain said.

The new agreement builds on Coles’ long-standing relationship with Accenture which has seen the two companies work together on transformational technology projects as well as delivering ongoing development and support of core merchandise, supply chain, and in-store systems.

As part of the expanded relationship, Accenture will invest in a joint innovation fund focused on exploring new technology applications within Coles, including the creation of roadmaps that will ensure Coles’ digital capabilities keep pace with the company’s long-term strategy, underlining Coles’ commitment to innovation and more agile ways of working.

“The evolution of the relationship with Accenture reflects the company’s strategy to win together through genuine partnerships with suppliers,” Coles Chief Innovation and Digital Officer Roger Sniezek said.

“Accenture is a global leader in the digital space and in working together over the past years across a wide range of areas of Coles Group, we have each come to understand each other’s businesses, strengths, and ways of working,” he said.

“By leveraging this enhanced relationship, we will work together to build Coles’ technological capability, so we have the tools we need to inspire our customers and make life easier for our team members.”

The deal will also give Coles access to Accenture’s leading technology experts across their global network, which spans more than 40 industries and all business functions, to lend their skills and insight to innovation projects at Coles.

Mr Sniezek said Accenture will also support the implementation of SAP solutions across procurement, human resources, and finance.

“Accenture has a strong track record of transformational technology within partner businesses around the globe, including some of the world’s biggest and most successful retailers. This will really assist us in executing at pace,” he said.

“Accenture is a leading business partner for SAP, and widely recognised for their expertise in implementing their solutions in large organisations. Coles will be able to work with Accenture’s leading global experts to ensure that our innovation and digitalisation strategy is informed and accelerated by a wealth of experience.”

Glenn Heppell, Managing Director of Accenture’s Products business in Australia and New Zealand, said he was delighted to be working with Coles on the next horizon of digital transformation.

“This represents a real strengthening of the relationship we have built with Coles, and our teams are looking forward to supporting Coles to take new ideas all the way from strategy to research and development, and finally execution,” he said.

 

Coles sign deal with Microsoft

Coles has signed a strategic partnership with software giant Microsoft to accelerate its digital transformation, using cloud-based innovation to transform the shopping experience for customers, make life easier for team members and improve productivity across the business.

This announcement is the latest in a series of global partnerships and developments through which Coles is building its technology and digital capability.

The long-term strategic partnership is founded on Microsoft Azure becoming Coles’ cloud platform of choice, which will enable Coles to drive simplicity and efficiency in its operations by migrating its applications to Azure.

Together with Microsoft, Coles is building an enterprise data platform in Azure that will power advanced analytics across Coles and enable the rapid deployment of artificial intelligence (AI) technology to drive innovation in physical stores and through the supply chain.

The use of Azure AI services will bolster Coles’ ability to use a variety of customer insights to drive decision making and better tailor its range to meet the needs of customers and how they like to shop. These decisions will be based on deeper data analysis from its proprietary research, flybuys and customer transactions.

In addition to more personalised customer benefits, a key part of Coles’ Smarter Selling strategy is in its stores, where team members will be provided with a range of new tools that will transform how they work, such as removing manual tasks for repetitive activities like stock management and price markdowns. These changes will boost productivity and allow them to focus on the things that matter most to customers.

Coles will also deploy Microsoft’s Dynamics 365 enterprise resource planning solution in its Coles Express and meat manufacturing businesses to create simpler, more efficient and robust operations that empower team members.

To assist Coles in achieving more agile ways of working, as part of the company’s commitment to deliver its strategic goals for higher team member engagement and pace in execution, it will deploy Microsoft’s Modern Workplace suite of technologies including Office 365.

Microsoft will also provide tailored training for Coles’ digital and technology teams so they have the necessary skills to exploit the full potential of the new platforms.

Further, as part of the strategic partnership, Microsoft will invest its world-class engineering resources to innovate with Coles to deliver technology-led, next generation retail solutions.

To ensure that all these transformational initiatives can be delivered at pace, Microsoft will provide direct executive support from its global product functions.

“As a proudly Australian retailer for the past 105 years, Coles has constantly evolved to meet the needs of our customers – from a single general merchandise store in Melbourne to the first supermarkets and now same-day delivery to customers’ kitchen benchtops,” said Coles’ chief information and digital officer Roger Sniezek.

“This strategic partnership builds on our long-standing relationship with Microsoft and will enable the Smarter Selling pillar of our strategy through efficiency and pace of change. We’re very confident that Microsoft will empower us to achieve more.

“By moving to the Azure cloud we will be able to simplify our operations and deliver at pace. The Azure-based Enterprise Data Platform will allow us to execute advanced analytics and artificial intelligence across all areas of our business at extreme scale. Dynamics 365 will power a few of our business units, driving simplicity, speed, and robust processes.

“Coupled with the innovation lab and full executive support from Microsoft, this is an incredibly broad strategic partnership that demonstrates Coles’ commitment to win together with our team members, suppliers and the communities we serve in our second century,” Sniezek said.

Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business, said Microsoft’s experience working with global retailers will help it best support Coles in its technological transformation.

“As the retail industry continues to undergo massive transformation, forward thinking companies are exploring how to leverage technology to better serve their customers and employees,” Mr Althoff said.

“We are excited to bring our global retail experience to Coles. Through our partnership, we will support Coles to provide personalised, seamless experiences for shoppers using AI, offer a more productive workplace for team members through modern collaboration tools and help them unlock better business insights through our advanced analytics solutions.”

Coles online celebrates 20 years

Coles has marked two decades of online shopping in Australia, starting from a single Melbourne warehouse to become a $1 billion business leading the market in adoption of game-changing retail and logistics technology.

Coles Online launched in 1999, just a few years after dial-up internet connections became widely available to Australian homes and almost a decade before the first smartphones hit the market.

At the time, online shopping was still in its infancy, with fewer than 5 per cent of all Australian adults using the internet to make a purchase or order goods or services that year*.

At launch in June 1999, Coles Online offered delivery services to just 23 postcodes in Melbourne, operating out of a single pick-and-pack warehouse in Clayton, with some items also sourced from Coles Springvale. A trial commenced in Sydney the following December.

Brian Donald, one of Coles Online’s longest serving team members, delivered customer orders in the program’s early days and said the platform has come a long way.

“The website was almost just a list and you had to tick the items you wanted,” he said.

“Everyone paid via eftpos on the doorstep because no one would pay online via the internet back then. So most people were sort of waiting with trepidation about what they were going to get and it was a really new and surprising experience.”

By 2002, Coles Online was delivering 1 million items per month to customers, and in 2003 the business doubled in size with the acquisition of Shopfast, which at the time was Australia’s largest online grocery site.

Coles Online also outsourced picking, packing and delivery to Australia Post in 2003 – a sharp contrast to today, with Coles team members handling all aspects of order fulfilment from stores across the country and using Coles Online’s own fleet of 650 delivery vans to bring orders direct to customers’ kitchen benchtops.

By 2008 Coles Online had expanded to Queensland, and the following year launched in Western Australia and South Australia – two more stepping-stones on the way to the current delivery service which covers 80 per cent of Australian homes.

The first Click&Collect lockers appeared in 2009. By 2015, Click&Collect was available at 120 sites, and has now grown to more than 1000 collection points including Coles supermarkets, Coles Express sites and Click & Collect lockers, accounting for around 30 per cent of customer orders.

With annualised revenue passing $1billion this financial year, Coles Online General Manager Karen Donaldson said the business was now setting the foundations for future growth through a partnership with the UK’s Ocado Group, the world’s leading online grocery platform.

“Coles Online has changed enormously over the past 20 years, and that pace is only going to accelerate,” she said.

“As part of our Smarter Selling strategy, Coles is increasing our use of technology to improve efficiency and enable us to keep pace with rapidly-evolving customer needs. Ocado’s automated fulfilment technology and home delivery solution will ensure that we deliver a best-in-class customer experience,” she said.

Ocado will construct two automated fulfilment centres in Sydney and Melbourne by FY2023, providing greater range and availability, improved freshness, more delivery slots for customers and the world’s leading online grocery website platform.

“Coles has been a great Australian retailer for 105 years, and our partnership with Ocado is part of ensuring the sustainability of our business so we continue to win together with our customers, team members and suppliers in our second century,” Ms Donaldson said.

Brian, now Coles Online’s Business Process and Improvement Manager, has moved from delivering orders himself to developing an efficiency program to minimise the distance travelled by Coles Online vans – allowing for quicker delivery, lower costs and fewer emissions.

The growth of Coles Online over the past 20 years has not just provided Brian with a career – it’s also played a role in his family.

Brian first met his wife Jasmin met while the pair both worked at the Clayton warehouse. Today, they have two children: Paige, 6, and Archer,1.

Coles Online celebrated their arrival of both children in the most fitting way possible, naming Coles Online vans after each of them.

Coles release Wellness range of health foods

Coles Wellness Road health food range consists of 28 products including Organic Black Rice Noodles with Chia, Organic Cacao Powder, White Chia Seeds and Australian Almond Flour.

Coles Chief Operating Officer, Greg Davis, said the Wellness Road range was aimed at making healthier options more accessible and affordable for customers who wanted to include better choices in their everyday diet.

“From teenagers, through to those in their 60s and 70s, our customers are telling us that they want to eat less processed foods and cut back on sugar and salt,” he said.

“But customers also don’t want to change their entire diet or pay a huge premium for healthier foods, and they don’t have time to make a special shopping trip for a couple of ingredients.”

All Wellness Road products are a healthier choice than equivalent ‘conventional’ products, free from artificial colours and flavours, made with reduced levels of sugar and salt and free from trans fats.

“What we’ve looked to do with Wellness Road is simply provide our customers with uncomplicated goodness – delicious tasting and nutritionally-balanced products – and importantly, at great value,” said Mr Davis.

An example of this is the Wellness Road Organic Cacao Powder which is available for $10 for 500g – around one-third the price you might find at specialist stores.

Former MasterChef Australia contestant and resident chef for the Sydney Swans, Courtney Roulston, said the range made nutritious, healthier cooking easier while providing more options for easy and delicious meals.

“Great cooking relies on great ingredients, and when you have a range of healthier products that are more readily available and affordable, there’s no excuse that your next meal shouldn’t be delicious and healthier.” she said

Coles set to modernise supply chain

Coles Group has  announced it has executed definitive contracts with WITRON Australia to develop two new automated ambient distribution centres, one in Queensland and another in New South Wales.

Witron Australia is a subsidiary of Witron Logistik + Informatik GmbH, the German-based global leader in building automated distribution centres that deliver improved product availability for customers and cost efficiencies.

Concurrently, Coles has also entered into agreements for lease catering for the development of the distribution centres at Redbank in south-west Brisbane with Goodman Group, and Kemps Creek in western Sydney, with a joint venture of Goodman and Brickworks. The term of each lease will be 20 years.The agreements with WITRON, Goodman and Brickworks are subject to the satisfaction of certain property related conditions precedent including development approvals.

Coles CEO Steven Cain said: “With the signing of these important contracts, Coles is one step closer to implementing a key element of its supply chain modernisation strategy. This will provide a safer working environment for our team members, lower supply chain costs, enhance our overall business competitiveness and make life easier for our customers by having the right offer in the right location.”

The total capital expenditure relating to Coles’ supply chain modernisation project for the two automated distribution centres is approximately $950 million over six years.

Coles also confirms it will recognise a pre-tax provision of $146 million in its 2019 interim result as a significant item, relating to lease exit costs and redundancies for existing distribution centres that will be closed over a five year period.

Increase in milk price helps with relief fund

Coles has announced that it has begun distributing $3,974,292.30 collected by their Coles Dairy Drought Relief Fund.

“This is great news for 639 dairy farmers across Australia, including more than 190 Norco Member milk suppliers, who will now receive payments from the fund,” Norco Chairman / Interim CEO Greg McNamara said.

“Coles announced in September that it would add 30 cents to the price of Coles Own Brand 3 litre milk sold between 21 September and 31 December 2018, with the extra money going into a fund to help dairy farmers struggling with the impact of drought.

“Due to the extremely difficult conditions on farm and recognizing that our Members were being burdened with additional farm work due to the drought, Norco allocated resources in assisting Members to complete their applications to the fund.

“I am pleased to advise that the Co-operative was actively involved in the application process for around 80 per cent of the more than 190 Norco Members who will receive payments from the fund.

“As a 100 percent farmer-owned dairy co-operative, we really want to thank all the customers who supported this Coles initiative, which in turn has provided much needed assistance to our Co-operative Members. Our strategic partnership with Coles and the support they have provided is very important to our dairy farmer members who continue to be adversely affected by this prolonged and debilitating drought,” said McNamara.

 

Coles now trading on ASX as COL after demerger goes ahead

The Supreme Court of Western Australia has approved the demerger between Coles and Wesfarmers.

By November 21, Coles is expected to commence trading on ASX under the new ASX Code ‘COL’.

The move comes after Wesfarmers shareholders voted in favour of the proposed $20 billion demerger of the supermarket giant.

A total of 601,032,572 votes were cast in favour with 2,900,858 against.

READ: Wesfarmers plans to make Coles a separate company

A scheme booklet, announced in early October, detailed changes the demerger would bring.

With Coles now admitted to the official list of the ASX, the company will consist of three key divisions ­– supermarkets, liquor and convenience.

Coles’ net debt following the demerger will be about $2 billion, and its balance sheet is expected to support strong investment grade credit ratings.

In the booklet, Wesfarmers board chairman Michael Chaney said Coles’ turnaround over the past decade, and its strategy to ensure it remains a trusted brand for Australians, sees it well positioned to continue to grow as a mature defensive business with strong investment characteristics.

“We are committed to ensuring Coles is set up with a strong foundation for success and growth as an independent listed company,” he said.

From its origins in 1914 as a variety store in Collingwood, Victoria, Coles has grown to become a leading Australian retailer.

Sales in the Australian grocery and liquor industry have grown over the period of June 1985 to June 2018 by 6.2 per cent and 7.2 per cent per annum respectively.

Coles raises more than $7.1 million for drought appeal

Coles and its customers have contributed more than $7.1 million to the Country Women’s Association of Australia to help drought-affected farmers.

With Coles matching every donation dollar-for-dollar during August and September, customers and the supermarket chain have helped to raise funds for household and family expenses.

Coles also pledged $5m in grants or interest-free loans from the Coles Nurture Fund for farmers who have a project that will help them combat drought in the future.

Country Women’s Association of Australia board member Lyn Harris thanked Coles and its customers for their generous contribution which will go towards supporting drought-affected families where it is needed most.

READ: Climate adaptation project helps local producers cope with drought

Coles Store commercial and property director Thinus Keeve said the company is overwhelmed by the generosity of local shoppers across the country who have shown their support for Australian farming communities by donating at Coles checkouts.

“We are incredibly grateful for this tremendous contribution from our customers and team members who have gone above and beyond to raise funds for the Country Women’s Association drought appeal,” he said.

“[It] will go back to supporting local farmers, growers and producers who are experiencing hardship as a result of the drought,” said Keeve.

The Woolworths group also raised more than $7m for farmers and Harris Farm Market also donated to the drought-stricken communities.

Coles opens boutique style food store in Melbourne

Coles has opened its first smaller Coles Local store in Melbourne’s Surrey Hills.

The new look store, which opened on November 13, is about half the size of a full-size Coles supermarket – at about 1280sqm.

It has an in-store barista and chef, a food waste digester, 100 per cent Australian-grown fresh food, and a new range of Coles Local branded products including convenience meals.

Coles CEO Steven Cain said the new store gives the community the convenience of a supermarket with the character of a specialty store.

READ: Wesfarmers releases scheme booklet detailing proposed Coles demerger

“The great thing about Coles Local is that it makes life easier for our customers and helps them explore their love of food.

“Our customers have told us they’re often juggling shopping with a busy family and work schedule, so there will always be a friendly team member who can help them find the specialty products they want to take home for their families,” said Cain.

The new store offers an extensive vegetarian and vegan range, sweet treats and baked goods.

It has a zero edible food waste policy and features a food digester, which uses water and microbes to partly digest inedible food waste.

The waste is sent to a local waste water treatment plant where it is turned into renewable energy. All edible food waste will be donated to Australian charity SecondBite.

The store’s refrigeration system uses a closed-water-loop system and energy-efficient design.

It is part of Coles’ $120 million investment in Victoria over the next 10 months.

Coles said it will listen carefully to customer feedback on the Surrey Hills store as it plans the roll out of more smaller format stores in the coming years.

 

Amazon takes on the Australian food market

Amazon Australia is joining the food market by releasing a line of dry grocery products from October 17.

Items will include tea, coffee, biscuits and organic foods, and products from companies such as Arnott’s and Uncle Toby’s.

Amazon Australia country manager Rocco Braeuniger said since the launch of amazon.com.au in December 2017, Amazon has been focused on growing its selection and services for Australian customers.

“We are delighted to add to the over 80 million products already available on the store with the launch of Pantry Food and Drinks, bringing greater convenience to customers, underscored by everyday brilliant value and fast delivery,” said Braeuniger.

READ: Wesfarmers releases scheme booklet detailing proposed Coles demerger

It is responding to the growing health food trend in Australia by including a number of health and organic food brands in its new range, Amazon explains.

Amazon has also introduced one-day delivery for some urban areas as part of the service in Australia.

German discount retailer Kaufland is also expanding into the Australian market.

The company is expected to open its first two hypermarkets in Australia in 2019 with plans to open 32 stores in Australia by 2023.

Kaufland currently operates more than 1250 stores across Europe.

Despite new competition coming to the Australian market, Coles saw growth in its total sales for the first quarter.

Coles’ supermarket sales were up 5 per cent in the 13 weeks to September 23.

Coles’ Little Shop campaign helped sales jump during the first quarter.

The food sales increase was 0.3 per cent up the corresponding period last year, and up on the previous quarter’s 1.8 per cent lift.

Wesfarmers releases scheme booklet detailing proposed Coles demerger

Wesfarmers Limited has released a scheme booklet detailing its proposed demerger of the Coles business.

The booklet was announced in early October, with the demerger expected to be completed in November 2018.

It is anticipated the proposed demerger will create a new top 30 company listed on the ASX, with leading positions in supermarkets, liquor and convenience.

If the demerger proceeds, and Coles is admitted to the official list of the ASX, new proposed Coles board and committee charters and key policies will apply from the date of listing on the ASX.

READ: Wesfarmers plans to make Coles a separate company

These charters and policies are summarised in the scheme booklet, which sets out the effects of the demerger, certain information required by law and all other information known to the Wesfarmers directors, which is material to the decision of Wesfarmers shareholders to vote in favour of, or against, the demerger resolutions.

Coles will consist of three key divisions ­– supermarkets, liquor and convenience.

Coles’ net debt following demerger will be about $2 billion, and its balance sheet is expected to support strong investment grade credit ratings.

Wesfarmers board chairman Michael Chaney said Coles’ turnaround over the past decade, and its strategy to ensure it remains a trusted brand for Australians, sees it well positioned to continue to grow as a mature defensive business with strong investment characteristics.

“We are committed to ensuring Coles is set up with a strong foundation for success and growth as an independent listed company,” he said.

Wesfarmers plans to retain a minority ownership interest of 15 per cent in Coles and a 50 per cent interest in the flybuys joint venture with Coles.

“This will support strategic alignment between Wesfarmers and Coles in relation to mutually beneficial growth initiatives, including in the areas of data, digital and loyalty, and support the continued development of flybuys by leveraging the combined Coles and Wesfarmers digital and data assets,” said Chaney.

From its origins in 1914 as a variety store in Collingwood, Victoria, Coles has grown to become a leading Australian retailer which sells everyday products including fresh food, groceries, household goods, liquor, fuel and financial services.

Sales in the Australian grocery and liquor industry have grown over the period of June 1985 to June 2018 by 6.2 per cent and 7.2 per cent per annum respectively.

As at 30 June 2018, Coles processed more than 21 million customer transactions on average each week, had more than 112,000 team members and operated 2,507 retail outlets nationally.

For the year ended 30th of June 2018, Coles had pro forma revenue of $39.3b and pro forma EBIT of $1,414 million.

 

 

RSPCA celebrates industry leaders in food services sector that use cage free eggs

The RSPCA has launched a nationwide campaign that focuses on Australia’s largest hospitality and food retailers who have switched to cage-free eggs.

The celebratory ‘Cage Free and Proud’ campaign recognises  brands such as McDonald’s, Subway, Grill’d Healthy Burgers, Nando’s, Harris Farm Markets, Arnott’s and IKEA, as industry leaders who have acted on consumer concerns and stopped sourcing eggs from battery cages.

They’re joined by national retailers ALDI and Woolworths, which have made the commitment to phase-out cage eggs in store by 2025, and Coles, which will phase-out cage eggs in store by 2023.

RSPCA Australia humane food manager Hope Bertram said the food services industry is the next frontier in the effort to rid Australia of battery cages.

READ: What eggs can teach us about traceability 

“While the cage egg industry and legislation lags behind, Cage Free and Proud is about positively recognising those businesses that have made the right decision by their customers and are helping free smart, social, egg laying hens from cruel battery cages,” said Bertram.

“The past five years has seen a significant shift in consumer buying behaviour, with cage-free eggs now leading the market share in the supermarket,” she said.

“However, there are still more than 10 million hens whose entire lives are spent in a barren wire cage, with space around the size of an iPad.

“The majority of those cage eggs aren’t going into household fridges; they are going into food services – such as cafes, restaurants and catering companies- as well as food manufacturing – packet mixes, mayonnaise, biscuits, cakes, and so forth,” said Bertram.

“Australians have voted with their wallets when it comes to buying cage-free cartons at the supermarket, and they want cage-free when dining out and buying premadeand pre-packaged food too.

“The commitment from these major brands shows there is no excuse for the continued use of battery cages,” she said.

“The future of egg production is definitely cage free. Through this campaign and beyond, we expect to see many more brands make the switch to cage-free eggs so they can also be Cage Free and Proud,” said Bertram.

The Cage Free and Proud campaign will be supported by a nationwide advertising and public relations campaign that includes print, outdoor, radio, television and digital advertising as well as communications activities.

Woolworths and Coles dominate Australia’s $2.9 billion fresh bread market

Australia’s $2.9 billion fresh bread market is dominated by the two supermarket companies –Woolworths Group and Coles Group.

These companies represent a combined 51.9 per cent of the fresh bread market, according to the Roy Morgan results for the year to June 2018.

In total, supermarkets now comprise more than two-thirds of the entire fresh bread market with the remaining 31 per cent split between specialty bread shops including Bakers Delight, Brumby’s Bakery, and between delicatessens, milk bars, convenience store and other stores.

Over the past eight years there have been three stand-out performers in the fresh bread market.

READ: Survey shows ALDI is the most trusted brand in Australia

Roy Morgan CEO Michele Levine said although Woolworths and Coles had the majority of the fresh bread market for more than five years, the success of Bakers Delight and Aldi in growing market share showed there was space for nimble competitors.

“The dominance of Australia’s two supermarket giants Woolworths and Coles is well known, with the two now comprising over half the Australian markets for fresh food including fresh meat, fresh fruit and vegetables and fresh bread,” she said.

“Although the two clearly dominate Australia’s fresh bread market, the growth this decade has been led by Coles Group which has significantly increased its market share by 6.2 per cent to 25.3 per cent, while Woolworths is little changed with 26.6 per cent of the fresh bread market,” said Levine.

German supermarket chain Aldi has grown its market share by 3.1 per cent to 7.1 per cent and specialty bread shop Bakers Delight now has a market share of 13.6 per cent, up by 0.5 per cent from June 2010.

“There are two competitors in particular outside the ‘Big 2’ who have grown their share of the fresh bread market and they come from very different origins. Aldi has made a huge impression on the Australian marketplace since opening its first store just over 15 years ago,” said Levine.

“Aldi’s success has been built upon not only discount prices but also a reputation for reliability, meeting the needs of consumers and being honest about what it has to offer. Aldi has consistently rated as one of Australia’s most trustworthy brands including retaining its spot as Australia’s most trusted brand in this week’s Roy Morgan Net Trust Score survey for July,” she said.

Despite facing a resurgent Coles in recent years Woolworths has retained its title as Australia’s largest retailer of fresh bread capturing a market-leading 26.6 per cent of the fresh bread market.

Other outlets for fresh bread including IGA and other supermarkets as well as Brumby’s Bakery and other smaller bread shops and delicatessens, milk bars, convenience stores have also experienced declines in their share of the fresh bread market of 1 – 2.4 per cent.

These results are from the Roy Morgan Single Source survey of more than 50,000 people per annum, including more than 12,000 grocery buyers.

Roy Morgan recently analysed the state of the overall grocery market in Australia, which is valued at more than $100 billion per annum. The latest results show Woolworths and Aldi have been the two best performers in the last year with both gaining significant market share. Further analysis, including the shares of the major supermarkets of the overall fresh food market.

 

Supermarkets match customer donations dollar-to-dollar to help farmers

Supermarkets in Australia continue to provide farmers with help during the drought, including Coles with its pledge to match customer donations dollar-for-dollar.

Coles’ promise to match customer donations will go for the entire month of August, in order to help farming communities doing it tough due to drought conditions.

The combined donations raised at checkouts and matched by Coles will be provided to the Country Women’s Association to support drought-affected families, to help cover household expenses such as school expenses and food, medical, electricity and water bills.

Coles managing director John Durkan said customers wanted to do more to support families affected by drought.

READ: Sheep and cattle slaughter increases to reduce stock numbers during drought

“For every donation no matter how big or small, our customers can be assured they will be making a difference to the rural communities experiencing hardship and distress,” said Durkan.

The matching donation  is in addition to $5 million already pledged in grants or interest-free loans from the Coles Nurture Fund for farmers who have a project which will help them to combat drought in the future.

Harris Farm Markets also announced it is matching donations dollar-to-dollar in August.

In a release, Tristan Harris, from Harris Farm Markets, said farmers deserved a fair grow and they needed people’s support in these trying times.

From the 2nd of August the supermarkets had donation boxes in all its shops collecting funds for rural aid, for four weeks.

Harris Farm Markets also had a cook-up at all stores in the first weekend of August, selling food for $5 with all proceeds helping provide hay and stock feed for drought-stricken farmers.

On the 11th of August, Woolworths donated all profits from sales in the fresh departments at its supermarkets to the Rural Aid Buy a Bale appeal.

It followed a $1.5 million donation from Woolworths, in July, aimed at supporting farmers impacted by the drought.

 

 

droughtColes

Coles announces $5 million to help farmers combat drought

Coles is providing $5 million in grants and interest-free loans from its nurture fund to help farmers across Australia combat drought.

In the past year, Coles also provided more than half a million dollars in grants to farmers who applied to the Coles nurture fund to implement initiatives to make them less dependent on rain.

In Coolac, New South Wales, Michael Crowe from Gobarralong Valley Beef used a $400,000 Coles grant to build facilities to manufacture a nutritious animal fodder indoors – making him less dependent on grass and water.

At Oxley Flats in Victoria, Nigel and Hannah Stephens received a $134,000 grant to install a more efficient irrigation system so they could reduce their water use and grow grass-fed beef all year round.

READ: NSW government offers more funding for drought-stricken farmers

Coles also launched a fundraising appeal at the end of July at its checkouts for people to support farmers struggling with the effects of drought.

All funds raised at the checkout will be provided to the Country Women’s Association to provide support to drought-affected families to help cover household costs such as school expenses and food, medical, electricity and water bills.

Coles managing director John Durkan said Coles was keen to do more to support families affected by drought.

“Many of our team members at stores in drought affected communities have heard harrowing stories from customers about the impact of the drought,” he said.

“Our store teams in these communities have helped by collecting donations of non-perishable food or providing gift cards but we wanted to take action at a national level to help more families facing hardship right now and to help farmers to combat drought in the future,” said Durkan.

Coles’ support will involve a fundraising appeal whereby customers can donate $2, $5, $10 or an amount of their choice at any Coles checkout across Australia, and $5 million in grants or interest free.

The company is also supporting its grass fed beef suppliers by buying their livestock as grain fed beef if the farmers have been forced to feed grain to their cattle during the drought.

Coles switches to recyclable and renewable meat packaging

Coles is introducing meat packaging made entirely from a combination of recycled and renewable material.

The new packaging will be used for a wide range of its Coles brand fresh meat and poultry products.

Coles bought about 121 million recyclable meat and poultry trays, in 2018, from Australian manufacturer Plantic Technologies.

Coles will use Plantic’s barrier trays, made from recycled polyethylene terephthalate (PET), along with a thin layer of Plantic’s renewable barrier material to help keep the meat fresh.

READ: Coles and Woolworths still lead fresh fruit and vegetable market

During the recycling process, the thin plant starch layer washes away, allowing the PET tray to be recycled.

Coles director of fresh produce, Alex Freudmann, said it was an important step in Coles’ goal to become more sustainable.

“For four years, our Coles brand beef, lamb and pork mince has been packaged in recyclable trays sourced from Plantic. We now want to take the next step by transitioning a wider range of our fresh meat and poultry trays to Plantic’s new packaging, so that it is not just recyclable but also made from recycled plastics and renewable plant materials including corn,” he said.

“We understand the important role that packaging plays in maintaining food safety, supporting product longevity and reducing food waste. At the same time, we are committed to reducing our impact on the environment and continue to look for opportunities to increase the content of recycled material in Coles brand packaging and improving recycling communication to customers on pack,” said Freudmann.

Plantic’s materials carry the Australian Recycling Label, which provides consumers with information on what packaging can be recycled and whether it can be recycled in kerbside recycling.

Plantic Technologies CEO Brendan Morris said the company saw the partnership with Coles as a defining opportunity to strengthen the local recycling industry.

“The problem in Australia is that there hasn’t been lot of processing of kerbside recycling done on-shore. Instead we’ve been sending it to China. As a result, there has been little investment to reprocess the waste within Australia and there’s not enough capacity here. At the same time, Australia is importing plastic into the country that can’t be recycled. These two factors combined means the waste is just piling up,” he said.

“Plantic decided that if we’re really committed to this and want to make a benefit to the environment and make a real difference then we need to start now, with Coles supporting us.”

Coles aims to make all Coles brand packaging recyclable by 2020.

Coles and Woolworths still lead fresh fruit and vegetable market

Analysis of long-term market trends by analysts at Roy Morgan shows that in 2018 Australia’s two largest supermarkets captured more than 51 per cent of Australia’s $18 billion fresh fruit and vegetable market between them.

According to market analysts, Roy Morgan, the Woolworths Group with a 27.4 per cent share, up 1.3 per cent points since 2017, and Coles Group with a 23.9 per cent share, down 0.7 per cent points, had a combined share of the fresh fruit and vegetable market larger than all other retail outlets including rival supermarkets Aldi and IGA, fruit shops, markets, other supermarkets and other non-supermarkets combined.

Woolworths enjoyed stronger growth in the fresh fruit and vegetable market over the past year than rival Coles, who despite increasing their number of buyers in an average seven day period had a decrease in the share of market.

Third largest supermarket Aldi now has a 10.1 per cent share of the fresh fruit and vegetable market, up 0.6 per cent in a year – although all three have taken substantial market share from traditional fruit shops. Aldi is fast approaching as the third major supermarket group set to overtake fruit shops, which currently account for 15.8 per cent of the market.

Majority of fresh meat now bought at Coles & Woolworths

Analysis of long-term market trends shows that for the first time in 2017 Australia’s two largest supermarkets captured more than 50% of Australia’s $13 billion+ fresh meat market between them.

Market leader Woolworths Group with a 26.5% share, up 1.1% points since 2016, and Coles Group with a 24.3% share, up 2% points, had a combined share of the fresh meat market larger than all other retail outlets including rival supermarkets Aldi and IGA, butchers, markets, other supermarkets and other non-supermarkets combined.

Both Australian supermarket giants have enjoyed stronger growth in the fresh meat market over the past year than rival Aldi which now has a 9.6% share of the fresh meat market, up 0.9% in a year – although all three have clearly taken substantial market share from traditional butchers.

Ten years ago butchers and markets had nearly a third (32%) of Australia’s fresh meat market. Today this is just under a quarter (24%) of the fresh meat market is now held by butchers and markets.

In the last 12 months fresh meat market share for butchers and markets dropped 3% points. This is steepest drop of any time period in the last decade.

These results are from the Roy Morgan Single Source survey of over 50,000 people per annum, including over 12,000 grocery buyers.

Michele Levine, CEO, Roy Morgan, says Australia’s increasingly competitive fresh meat market is squeezing the market share of the traditional Australian butcher:

“Australia’s ‘Big Two’ supermarket chains Woolworths and Coles now capture over 60% of Australia’s $100b+ grocery market. In recent years the Big Two have been moving to consolidate their market shares in various fresh food markets including fresh fruit & veg, fresh meat, fresh bread, fresh deli and fresh seafood,” she said

“In just the past year Coles and Woolworths achieved a milestone, capturing a majority of the fresh meat market for the first time and now hold 50.8% of Australia’s fresh meat market between them. Woolworths’ fresh meat market share of Woolworths has increased 1.1% points over the past year to 26.5% while Coles has continued a decade long-trend by increasing its market share by 2% to 24.3%.

Australian fresh meat market 2016 v. 2017

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Source: Roy Morgan Single Source Australia, January 2016 – December 2016, n=8,301, January 2017 – December 2017, n=8,691. Base: Last 7 day fresh meat purchasers aged 14+ weighted to Australian households.

Wesfarmers plans to make Coles a separate company

Wesfarmers has announced its intention to demerge its Coles division, subject to shareholder and other approvals.

It is anticipated that the proposed demerger would create a new top 30 company listed on the Australian Securities Exchange, with leading positions in supermarkets, liquor and convenience, strong cash generation capability to underpin dividend distributions, and an earnings profile which is expected to be resilient through economic cycles.

The decision follows a review of the Wesfarmers portfolio and an assessment of the composition of its capital employed to support higher levels of future growth and total shareholder returns. As at 31 December 2017, Coles accounted for approximately 60 per cent of the Group’s capital employed and 34 per cent of Group divisional earnings.

Wesfarmers Managing Director Rob Scott said the Group was repositioning its portfolio to target a higher capital weighting toward businesses with strong future earnings growth prospects.

“Wesfarmers acquired Coles as part of Coles Group in 2007 and since then has successfully turned around the business and restored its position as a leading Australian retailer,” Scott said.

“We believe Coles has developed strong investment fundamentals and is of a scale where it should be operated and owned separately. It is now a mature and cash generative business, which is expected to have a strong balance sheet and dividend paying capacity. Coles will be well positioned to continue to deliver long-term earnings growth, with an earnings profile that is expected to be resilient through economic cycles.

“A demerger of Coles will facilitate greater focus by Wesfarmers on growth opportunities within its remaining businesses and the pursuit of value accretive transactions. The capacity to act opportunistically will be retained through a strong balance sheet and a cash generative portfolio. The Group expects to retain its current strong credit ratings and the dividend policy will remain unchanged.”

Wesfarmers Chairman Michael Chaney said the demerger would extend the Group’s long history of actively managing its portfolio.

“Wesfarmers’ operating model has benefited our shareholders over the long term and will continue to provide the framework for future capital allocation decisions,” Chaney said.

Wesfarmers post the proposed demerger Wesfarmers’ remaining operating divisions include a number of world-class businesses and leading Australian brands, including Bunnings, Kmart, Officeworks, and its Industrials portfolio.

The remaining divisions in Wesfarmers, excluding Resources, delivered compound annual growth in earnings of 8.9 per cent since FY2009 and generated a return on capital, excluding significant items, of 23.6 per cent, as at 31 December 2017. Organic and inorganic growth opportunities position these businesses well to deliver continued growth in earnings and returns.

 

Usain Bolt brings new hot sauce to Australia

Superstar sprinter Usain Bolt has teamed up with Coles supermarkets to create a line of hot sauces launching this week across Australia.

Rolling out in Coles supermarkets, the release of the line marks the first time Bolt has collaborated with a supermarket to develop a product.

Usain’s Insane Hot Sauce is available in three fiery flavours, all inspired by family recipes – Mango & Three Chilli, Pineapple & Jamaican Spice and Original Jamaican Spice.

The sprinter said the range was created to celebrate his passion for spicy food and bring a touch of Caribbean heat to everyday dishes.

“As I travelled the world I realised that Caribbean food was not readily  available outside places like the US, and I wanted to bring these special flavours to Australia,” he said.

“I love coming to Australia and have visited many times, so I wanted to develop a product that lets Australians experience real Caribbean flavours. The sauces can be added to anything, from chicken, pork or beef, to potatoes and rice to give any dish a true Jamaican twist.

“Thanks to Coles, these sauces are my first product to hit supermarkets and I hope people like it.”

Coles Chief Customer Officer, Simon McDowell, said the retailer was ecstatic to extend its relationship with Usain Bolt after he was recently announced as a Coles Sports for Schools ambassador.

“This partnership has been very exciting for us and for our customers. Not only are we bringing new and innovative products to our customers, we’ve been able to develop the products in collaboration with much-loved local Aussie supplier, MON Natural Foods.

“We are committed to supporting local businesses, so we are proud have MON Natural Foods on board to produce Usain’s hot sauces for our customers to try,” he said.

MON Natural FoodsBusiness Manager, Joshua Green said his team maintained a strong commitment to investing in locally sourced products since the family took over the business in 2012.

“We are excited to be partnering with Coles and Usain on these exciting new products which use as many Australian ingredients as possible,” he said.

“Thanks to our growing partnership with Coles we have doubled our production over the last three years, meaning we’ve been able to increase our local workforce from 30 to over 55 people.”