Good morning, everyone. My name is Bonny Rawson. I'm a senior product technologist in grocery and currently the co-chair of Coles First Nations Team Member Network Committee. I'm a proud Ballardong Noongar woman. My people are from the southwest region of Western Australia, so that is three hours east of Boorloo, otherwise known as Perth. I grew up in Perth and moved here to Naarm, Melbourne, in 2015 for a position in the Coles graduate program, and here I am eight years later. So I'd like to start today's AGM by acknowledging the traditional custodians of the land on which we meet, the Wurundjeri people of the Kulin Nation. I acknowledge their continuing practice of culture and connection to land, skies, and waters. I pay my respects to and acknowledge the elders that have come before me, who have paved the way for me to be here.
I extend that respect to our current elders, who continue to uphold our voice and lead in making changes for our people today. I extend this acknowledgement to all First Nations people, and thank you to the allies that continue to uphold and support Indigenous engagement at Coles. So Coles is one of the largest employers of First Nations team members in the private sector, with 3.5% of our team members identifying as Aboriginal and Torres Strait Islander descent. We have over 60 suppliers providing products or services to Coles, and are proud of the ongoing partnerships and relationships that we've built with Indigenous communities across Australia. I'm proud to work for a company that has the courage to push boundaries and to positively strive to meet ambitious targets for First Nations people.
Coles has had a dedicated plan to create positive impact on the First Nations community for over 10 years, and now it's more important than ever to continue our efforts to make lasting change. Thank you.
Thank you so much, Bonny, for your acknowledgement of country. A very warm welcome and great to see that the graduate program that's got at Coles has been able to be so successful over so many years. I also would like to take this opportunity to acknowledge the Wurundjeri people of the Kulin Nation, where I am standing today, and to acknowledge the traditional custodians of the country throughout Australia, and pay my respects to elders, past and present. I would also like to extend that respect to all Aboriginal and Torres Strait Islander Australians joining us at this annual general meeting today. Ladies and gentlemen, my name is James Graham, and as the Chairman of Coles Group Limited, it is my pleasure to welcome you to this annual general meeting.
It's wonderful to be back at the Melbourne Convention and Exhibition Centre, and particular thanks to all those who are present, attending in person. Thank you also to all shareholders, proxy holders, and guests who are attending online via the Lumi platform. Could I say, as a courtesy to everyone, would you mind making sure that your mobile phones and other electronic devices are silenced until the conclusion of today's meeting? Would you also please note the location of your nearest exit in the unlikely event that we needed to evacuate the building, which will be signaled by the sounding of a siren. As we certainly have a quorum, I now declare the meeting open. I would like to start our proceedings by introducing my fellow board colleagues. And joining me here in Melbourne, starting from my extreme right, is Abi Cleland, Scott Price, Wendy Stops.
Wendy will be later in the meeting, standing for re-election as a director of Coles Group Limited. On my immediate left, Daniella Pereira, who is our amazing company secretary. Leah Weckert, Managing Director and Chief Executive. Next to Leah is Richard Freudenstein. Richard is the Chairman of our People and Culture Committee. Next to Richard is Jacqueline Chow, and beside Jacqueline Chow, Terry Bowen. Welcome to all, all of my directors. I also note that members of the executive leadership team are joining us here today, seated in the front of the meeting room, together with David Shewring, who is representing the company's auditor, Ernst & Young. The notice of today's meeting has been distributed to shareholders, and I will take it as read.
Before we move to the formalities, I would like to explain the meeting procedures that we will use today with our hybrid format. I'm sorry that this is a little bit long-winded, but it is a necessary part of the meeting.... Consistent with the approach taken at our previous meetings, I will address questions relating to a particular item of business during discussion of that item. If you are attending online, you are most welcome to submit questions at any time from now. For those attending the meeting here in person, as you registered today, you were issued with a voting handset, or a yellow card, or a white card. Holders of the handset may speak and vote. Holders of yellow cards may speak, but may not vote.
If you hold a white card, you are a visitor, and you are welcome to attend, but you are not entitled to speak or vote. There are various microphones located in the room. Once we come to question time, please make your way to the closest microphone, give your name to the attendant, and show your handset or yellow admission card. If you are unable to make your way to a microphone, please raise your hand and a microphone will be brought to you. As a courtesy to all shareholders, please also state your affiliation if you are not attending today in your personal capacity. Your name will be announced to the meeting. Shareholders and proxy holders may also ask both written and live audio questions through the Lumi online meeting platform.
Detailed instructions on how to ask questions were set out in the online meeting guide available on Coles' Annual General Meeting webpage, a link to which is available if you click on the Home tab at the top of your screen. To ask a written question, click on the messaging icon, select the category your question relates to, and then type your question in the text box. Click on the small arrow to submit your question. If asking an audio question, we recommend you wait until the relevant agenda item is being discussed, as you will only be able to hear and not see the meeting while you are queuing to speak. If you encounter any difficulties with the Lumi platform, please call Lumi for technical assistance. Their number is shown on the Home tab at the top of the Lumi platform.
All questions at the meeting today must relate to an item of business under consideration and to the company as a whole. If your question is of a personal nature relating to your shopping experience at Coles Group, please visit the customer booth located in the foyer, where the attendants will be delighted to assist you. Our executive leadership team will also be available in the foyer following the meeting to answer any questions you may have of them. For any questions relating to your personal shareholdings, please make your way to the Computershare attendant, who will be delighted to assist you with any questions that you may have. If you are participating online, please contact our customer care number or the Computershare registry number shown on your screen.
In order to enable all shareholders a reasonable opportunity to be heard, we ask that shareholders restrict themselves to no more than two questions or comments initially. If we receive a number of questions that are similar, we may answer those questions collectively. If the questions are too lengthy, we may need to summarize them in the interest of time. Shareholders were encouraged to submit questions prior to the meeting. Thank you to those shareholders who have done so. We have sought to address common themes in these questions in the formal addresses, which will be made shortly. Moving on to the voting procedures. Today's voting will be conducted by way of a poll, and I now declare the poll open. The poll will remain open until the conclusion of the meeting.
For those attending in person, if you are eligible to vote, you would have been given a handset, which had a white plastic card inserted in the top of it at registration. Your name should be displayed across the top of the screen of your handset. If you require assistance, please raise your hand now, and one of the attendants will assist you. For those voting in person at the meeting, you should see the resolutions displayed on the handset screen. To vote, use the blue trackball on the handset to navigate to a resolution. Press the green square button to view the resolution and open the voting options. Then, cast your vote by pressing one, two, or three. You can change your selection by highlighting the resolution and pressing one, two, or three.
You can press the green square button to move on to the next resolution, or press the red triangle to return to the full list of all resolutions. The final selection on your device at the close of polling will be counted as your vote. Please ensure that you return the handsets to one of the assistants stationed near the exit when you leave today's meeting. If you have any issues, please raise your hand and one of the attendants will be happy to assist you. For those attending online, a voting icon will appear at the top of the left-hand side of your screen. Each proposed resolution will be shown on the screen. Click on the voting icon to submit your vote on each proposed resolution. If you require any assistance, please contact Lumi using the number shown on the Home tab at the top of the Lumi platform.
I think that deals with most of the procedural matters that I was required to bring forward, and I will now move to the formal part of the meeting. The 2023 financial year was a really significant one for Coles, our customers, suppliers, team members, and communities, as we achieved many milestones in our journey to build trust and grow long-term shareholder value. During the year, we saw a return to more normal trading conditions, being our first year where COVID-19 restrictions were less evident. Albeit that significant flooding events in the first half of the year disrupted road and rail networks, communities, and parts of our supply chain. The operating environment was also marked by increases in the cost of living, higher energy prices, the effects of inflation, all of which impacted our customers and their buying preferences.
These issues continue to be significant in our new financial year. Pleasingly, the retail industry, especially in food and drink, continued to show its resilience, and we were able to grow our total sales by some 5.9% during the year, including the growth of our Exclusive to Coles product range of 9.6% in Supermarkets and 8.5% in Liquor. Working closely with our suppliers, we continued to focus upon providing value, quality, and helping customers meet their needs in eating and living better every day. Over the last five years since demerger, Coles has placed significant emphasis upon increasing the attractiveness of our offering to and relevance for all Australians through increasing the use of technology to improve efficiency, lower operating costs, and extend freshness and product attractiveness across our food and Liquor businesses.
Enhancing the digital and e-commerce offering, and increasing the value of our loyalty program, especially Flybuys. Investing in our team to build greater levels of capability and service. Working more closely with our suppliers to ensure the growth of their businesses in a way which enhances value and supports their team members and their sustainability commitments. Engaging with our communities to provide support and build long-term and sustainable outcomes. During this last year, we also increased our portfolio focus upon food and drinks as a result of the sale of our fuel and convenience business, Coles Express, to Viva Energy. As part of this divestment, we received the payment of AUD 300 million, and we transferred lease liabilities of some AUD 816 million as at the end of the previous financial year.
6,000 team members also transferred with the business to Viva Energy, and I do wish to take this opportunity to thank each of them for the contribution and commitment which they made during their prior years of service with Coles. Against this background, in the 2023 financial year, we produced an after-tax profit from continuing operations of AUD 1,042 million and paid full-year dividends of AUD 0.66 per share, fully franked, which represented an increase of 4.8% on the previous year. This dividend represented a full-year payout of 80% of our after-tax profits, in line with our 80%-90% dividend payout policy, which has remained unchanged since the merger.
With commitments having initially been made some five years ago, it was really pleasing to see the commencement of the first of four transformational initiatives in April of this year, with the opening of our first of two automated distribution centers at Redbank in Queensland, just outside of Brisbane. This facility, opened by the Prime Minister, is centered upon Coles's exclusive access to the world-leading WITRON technology and is one of the largest distribution facilities of its kind in the Southern Hemisphere. This Redbank facility has been progressively ramped up since commissioning and is now servicing 219 stores in our Queensland and Northern New South Wales network. This automation allows us to improve efficiency, extend shelf life, reduce team member safety risks, and reduce our road transport requirements, thereby lowering emissions.
A second like-kind facility is due to commence inbound deliveries at Kemps Creek, New South Wales, just outside of Sydney, in the first quarter of next calendar year. Our third and fourth large-scale technology projects are our two customer fulfillment centers being built in Sydney and Melbourne by Ocado to extend and enhance the growth of our online business. Ocado is recognized internationally as one of the leading technology providers for online supermarket operations, with its improved availability, extended range, and superior freshness being key features of its customer offering. The construction program was delayed during this last financial year, but is now progressing in line with our updated timelines. We are expecting to commence operations at the end of the current financial year in Sydney, and during the middle of the next financial year in Melbourne.
The other significant capital project initiative has been our announced intention to purchase two milk processing plants from Saputo Dairy Australia, one in each of Victoria and New South Wales. The completion of this purchase is conditional upon the approval of the Australian Competition and Consumer Commission, which is currently being sought. Turning now to our sustainability commitments and community involvement. As a large corporation operating across Australia with more than 120,000 team members and more than 1,800 stores, we have the capacity to favorably contribute to lifting our performance and meeting community expectations for long-term sustainable practices. We have set targets across most areas of our group's operation, and each year aim to measure and improve our performance, which we publish in our sustainability report.
In this last year, we saw significant progress in our emissions targets, with our Scope 1 and Scope 2 emissions reducing by some 27.7% during the year, as we aim to achieve a reduction of more than 75% by the financial year 2030 from our 2020 baseline. In addition, we validated our Scope 3 emissions target with a Science-Based Targets Initiative. This will entail our working with our suppliers, as we have committed that 75% of our suppliers by spend, will have science-based emissions targets by the end of financial year 2027.
In the area of plastic, packaging, and waste, we saw further progress, including our removal of single-use plastic bags, saving some 230 million bags each year, and we diverted 84% of the group's solid waste from landfill, which was an increase of 1.5% diversion over the previous year. We continue to work as a member of the government's task force with industry participants on the future recycling of soft plastics, which activity has been challenged by the collapse of REDcycle and the loss of its recycling program. Our long-term relationships with SecondBite and Foodbank expanded during the year, and we were pleased to provide the equivalent of more than 35 million meals to Australians in need through SecondBite and their 1,100 charity partners across Australia, as well as more than 4 million meals through our partnership with Foodbank.
As regards our workforce, we continue to make significant progress against our established targets. Team safety is paramount, and as at the end of this last financial year, our Total Recordable Injury Frequency Rate reduced by a further 9.2%. This builds on the progress we've made since the merger, and is in fact 47% improvement since 2019. In addition, at year-end, we had surpassed our earlier goal for achieving women in leadership positions, which reached 41.5%. And as part of our Great Place to Work ambition, I am pleased that 7.6% of our team members now include team members who identify as having a disability.
In the context of team, I would like to refer to the recent national referendum on the Voice, about which a number of questions were submitted to us by shareholders in advance of today's meeting. Coles is very pleased to be one of Australia's largest employers of Aboriginal and Torres Strait Islander persons. This engagement reflects very specific policies developed and pursued by Coles for almost 15 years. As a result, today, 92% of all supermarkets have Aboriginal and/or Torres Strait Islander team members. And as Bonny noted earlier, in total, 3.5% of our team members identify as such. In addition, we have 63 Aboriginal and/or Torres Strait Islander suppliers and 16 community partnerships, all of which are encouraged at Coles.
Consistent with these long-standing commitments, we were supportive of the recent referendum initiative to enhance the communication with and engagement of Aboriginal and Torres Strait Islanders. However, we appreciated that there was a wide diversity of views, and we felt that it was our role as a large employer to provide information to and opportunities for discussion regarding the Voice amongst our team members in advance of the referendum. We saw our doing so as contributing to the informed, welcome, and thoughtful engagement of all our team as they each deliberated on their own decision. Now that the referendum outcome has been determined, we will continue to pursue opportunities for Aboriginal and Torres Strait Islanders across our business operations as we contribute to closing the gap. I should, however, correct a misunderstanding which was implicit in many of the shareholder questions which we received.
At Coles, we did not provide any donations or financial support to any group in the lead up to the referendum. Our support was centered upon providing information to our team members. During this week last year, we saw a number of developments, both within the board and management. At board level, there have been a number of significant developments since the date of our last annual general meeting. First, we have seen two retirements. David Cheesewright, who had been a non-executive director since demerger, retired in June, and Paul O'Malley retired at the end of October after three years on the board. We have been extremely fortunate to have enjoyed the participation of both David and Paul during this period of our development as an ASX-listed company.
The breadth of their commercial experience and insights made a significant contribution in our setting strategy and supporting management throughout their periods of office. On behalf of myself, the board, and the shareholders, I wish to extend our thanks to both of them. Secondly, we announced last week the appointment, effective from the first of December, of Mr. Andrew Penn as a non-executive director. Andy has very relevant experience in large, complex, customer-facing businesses, and we very much look forward to his participation on the board. Andy will assume the position of Chairman of the Audit and Risk Committee of the board, which was previously held by Paul O'Malley.
Thirdly, Terry Bowen, who has had a long history with Coles, having been its Finance Director some 15 years ago, and who joined the board as a non-executive director in October last year, will in fact retire from the board next February to assume a senior executive role. We very much thank Terry for his contribution over this period and greatly appreciate the benefits of his many insights in relation to the company's business.... During this past year, we have also seen the transition of Managing Director and Chief Executive from Steven Cain to Leah Weckert. Steven had been appointed to the position of Chief Executive of Coles in 2018, prior to the demerger from Wesfarmers. Steven led the company through this process, created the senior management leadership team, and developed the strategy to build Coles as an ASX-listed company.
This was an extremely demanding task and saw Coles embark upon its transformational projects and establish its strong management team. Steven's period of office included steering the group through the unexpected community-wide challenges of COVID-19 and addressing the many supply chain chain challenges, as well as natural disasters, which became characteristics of our everyday operations. On behalf of the board, our team, and all stakeholders, I extend our thanks to Steven for his important contribution to Coles over these five years. In February, the board was delighted to be able to announce an internal successor to the position of Managing Director and Chief Executive with the appointment of Leah Weckert, who assumed this role on the 1st May this year.
Leah is an exceptional leader whose extensive involvement with Coles extends over a period of 12 years and includes her roles as General Manager of Merchandise, Strategy, and Innovation, General Manager of Store Operations for Victorian supermarkets, Director of People and Culture, Group Financial Officer, and Chief Executive, Commercial and Express. The board very much looks forward to the future impact of Leah's leadership across the whole of the Coles Group's business. Before passing over to Leah to make her remarks, on behalf of the board, I would like to express our thanks to the executive leadership team and to our 120,000 team members, who every day face some new experience or challenge, and to our 8,000 suppliers, who are our partners in delivering upon our purpose of helping Australians eat and live better every day.
May I also extend my thanks to my board colleagues for the judgment, support, and advice which they provide, and to the continued support of you, our more than 440,000 shareholders, as we seek to build trust and grow long-term shareholder value. I will now invite Leah to address us, and as she approaches the lectern, we will show a brief video highlighting some of our sustainability initiatives through this last year.
2023 has been an important year for sustainability at Coles. As one of Australia's largest businesses, we have an opportunity and a responsibility to have a positive impact on our environment and in our communities. Last financial year, Coles contributed AUD 40.7 million in support to a range of charities and community organizations for children's health and nutrition, medical research, and innovation grants for farmers and producers. We also donated unsold edible food from our business to SecondBite and Foodbank, providing the equivalent of 40 million meals to help Australians in need. Coles is on a path to reduce our environmental footprint by harnessing renewable energy, minimizing waste, reducing plastic, and promoting the use of recyclable materials.
Last year, we made progress against our targets to deliver net zero greenhouse gas emissions by 2050, source 100% renewable electricity by the end of FY 2025, and reduce our Scope 1 and Scope 2 emissions by more than 75% by the end of FY 2030. We also pledged greater efforts to reduce emissions in our supply chain and will work with 75% of our suppliers by spend to help them set science-based emissions targets by FY 2027. We phased out single-use plastic bags, saving around 230 million from circulation in one year. We diverted 84% of total solid waste from landfills, and we continued to improve our packaging, with 83.8% of our own brand packaging now recyclable. Our journey to a more sustainable future is ongoing.
By focusing on the things that matter most to our customers, team members, and shareholders, we can drive meaningful change for our environment and community.
Thank you, James, and good morning everyone joining us in person and online. It's a privilege to be here this morning in my new capacity as Coles's CEO. In recent years, as the chairman has said, we've emerged from numerous challenges: COVID, natural disasters, and a range of supply chain issues. At the same time, the retail industry has been evolving, with changing customer preferences and behaviors and advancements in a range of technologies. Over the past six months, I have had the chance to meet with Coles teams around the country and to hear from our customers. This has given me a good perspective on what's working well and where we still need to improve. Customers are telling us that they want quality produce and products, convenience and flexibility in where, when, and how they shop.
They want shopping that is increasingly personalized and technology-enabled, healthy and sustainable food and packaging options, and being able to rely on the availability of the products they want to buy. And right now, above all else, they want us to deliver great value. Today, particularly as Australian households face higher cost of living pressures, we have such an important role to help their budgets go further, to help them affordably put dinner on the table, fill school lunchboxes, and enable them to celebrate the special moments in life with family, friends, and loved ones. With all of these factors in mind, we have recently reset our strategy. Our renewed purpose is helping Australians eat and live better every day. Helping refers to the growing asks from our customers to help them solve problems. What's for dinner? How do I be more sustainable?
How do I eat more healthily when life is so busy? Eat and live refers to food as our core purpose, but surrounding that with adjacencies like liquor, pet, health, beauty, and home care, which are all high transaction frequency, close to our core, and convenient to buy alongside food. Better refers to our passion for more delicious, more healthy, and more sustainable products. Every day is a very important concept. It points to the consistency we need to deliver in our business to give each customer a great experience in our stores and online, and with the products when they get them home, every day. To support this purpose, our new strategy will focus on creating a destination for food and drinks, accelerating through digital, and delivering consistently now and for the future.
As part of our strategy evolution, we have also done a lot of work with our team members to reestablish our company values. Our values, care for each other, deliver for customers, have the courage to make the right choices, and create for the future, are built on what team members tell us is most important and what will support them to succeed at work each day. It is all of these components working together that will enable us to deliver our vision to be the most trusted retailer in Australia and grow long-term shareholder value. Now, turning to some of our operational highlights of the year. With many Australians feeling the effects of cost-of-living pressures, we're focused on delivering great value in our supermarkets and online.
We launched Great Value Hands Down in August this year, which makes it easier for customers to find value across our stores and online. During FY 2023, we reduced prices through multiple rounds of dropped and locked campaigns. We provided thousands of weekly specials, and we had over 4,200 products on everyday prices. Our exclusive to Coles range is another way we provide value. Coles own brand has grown significantly over the past three years, contributing to about a third of our supermarket sales. In FY 2023, our exclusive to Coles range in supermarkets grew by 9.6%. We introduced an additional 1,400 Coles own brand items to the range, bringing the total to more than 6,000 products.
Flybuys has helped millions of customers to stretch their budget further, and the program now reaches approximately 80% of Australian households. In FY 2023, the program continued to perform strongly, with a 9% growth in active members. More than 1.1 million unique households participated in our immensely popular MasterChef Cookware collectible programs in FY 2023. We now have over 28 million kitchen items in Australian households from across all of our campaigns, which serve as a daily reminder to our customers of the differentiated value they receive when shopping with us. And in FY 2023, Coles Liquor continued to realize its vision to be a simpler, more accessible, and locally relevant drinks specialist. Our exclusive liquor brand collection received more than 500 awards, including the Tasmanian Gin of the Year trophy for our Pure Origin Tasmanian Dry Gin at the Melbourne International Spirits Competition.
People are at the heart of what we do at Coles, and we are proud of what we have been able to do alongside our team members this year. I would like to reiterate what the chairman said about our women in leadership targets. We were pleased to have reached 41.5% of our women in leadership roles across the group and record a company-wide gender pay parity gap of less than 1%. Coles was also awarded Employer of Choice for Gender Equality by the Workplace Gender Equality Agency for its active commitment to achieving gender equality.
At the end of the financial year, 3.5% of our team members identified as Aboriginal and Torres Strait Islander, and we were proud to have sponsored the Sydney WorldPride earlier this year, part of our commitment to creating a safe and welcoming environment for LGBTQIA+ people across our workforce and stores. We also offered inclusion training to our team members. We've continued to invest in our team members through development and training, and in doing so, we're investing for the future of our business. This year, Coles was recognized as an employer of choice for graduates in the Australian Association of Graduate Employers' Employer Report. For the fourth year in a row, Coles was named most popular retail and FMCG employer in the Australian Financial Review Grad Connections Top 100 Graduate Employers Award. Now, turning to the FY 2023 results.
We've delivered sales revenue growth from continuing operations of 5.9%, driven by value campaigns, successful execution of events like Easter, Christmas, and Mother's Day, collectible campaigns, as well as investments in our store renewal. EBITDA and EBIT growth from continuing operations was 3.8% and 1.8%, respectively. And when adjusted for the one-off implementation costs associated with our WITRON and Ocado programs the chairman spoke about, and the AUD 25 million provision related to the Fair Work Ombudsman proceedings, the adjusted EBITDA and EBIT growth was 5.3% and 4.5%, respectively. Our Smarter Selling p rogram continued to drive efficiency across our whole business to help offset the effects of inflationary pressures and to allow us to invest back into the business for the future.
By the end of FY 2023, we had reached our target of AUD 1 billion in cumulative benefits over four years, and in the past financial year, delivered benefits of approximately AUD 220 million as part of that Smarter Selling program. Now moving to FY 2024. Our Q1 sales in supermarkets and liquor were up 4.7% and 1.8%, respectively. Our sales results also highlighted our focus on building our Omni-channel offer, with supermarkets' e-commerce revenue growth of 24.6% and liquor e-commerce revenue growth of 32.2%. Christmas is right around the corner, and to help Aussies around the country celebrate, we have curated a Christmas range focused on providing value at every price point.
This year, we are featuring an impressive 349 products across supermarkets and liquor, from ham and turkey to puddings and mince pies. For those on hosting duties this year, our latest Curtis Stone barbecue cookware campaign will help inspire preparations with customers eligible to collect free barbecue cookware pieces when they spend and scan their Flybuys card. As we look ahead to the coming year and beyond, our unwavering priority will continue to be to deliver for our customers. Pleasingly for customers, we are seeing availability in stores improve and inflation in key categories begin to moderate. During Q1, fresh produce and red meat were in deflation, with lower prices year on year on things like soup, cucumbers, berries, beef, and lamb, for example. We are looking forward to progressing our supply chain automation projects further.
While the Redbank ADC in Queensland already services 219 stores, we are working towards the Kemps Creek ADC in New South Wales, receiving its first inbound deliveries in Q3. Our first CFC is scheduled to go live in New South Wales in the middle of calendar year 2024. To help us deliver consistently for the future, our new Simplify and Save program will again aim to deliver in excess of AUD 1 billion in cumulative savings over the next four years. We continue to focus on market performance, which is important to underpin the investment in growth initiatives that will deliver strong financial outcomes and support dividend payments in future years. In closing, I would like to thank James and the board for their support throughout the year.
I would also like to thank the Coles leadership team and to our team members right across the country for their outstanding work and commitment to our purpose. To our customers, thank you for choosing Coles. We hope you have a wonderful and safe Christmas. And finally, thank you to our 440,000 shareholders. We appreciate your support. Before I hand back to the chairman, I would like to share a short video about our first automated distribution center in Queensland.
Coles is modernizing its supply chain to improve efficiency and availability in its stores and deliver higher service levels for our customers, team members, and suppliers. We are proud to introduce our first automated distribution center in Redbank, Queensland, that was opened in April this year. The site spans 170,000 sq m, the equivalent size of two Melbourne Cricket Grounds.
The 66,000 sq m warehouse is one of the biggest and most productive automated distribution centers of its kind in the world. This is the single biggest capital investment and technology investment in Coles's history. We put our very best people on this project and chose a partner in WITRON, who have proven capability to deliver this level of technology and investment. The automated distribution center will provide the full range of ambient groceries to 219 stores, as far south as Laurieton, New South Wales, and as far north as Port Douglas in Queensland. When operating at full capacity, the site can process up to 4 million cases per week, the equivalent of 32 million units sold in stores. We are pleased that this facility will benefit team members, customers, suppliers, the environment, and will also deliver structural cost efficiencies to the business.
We look forward to unlocking its full potential.
Thank you very much, Leah, and hopefully, you could all get a glimpse of why we have been so enthusiastic about the opportunities which lie ahead with our two Automated Distribution Centers. And to have one of those up and operating across the 219 supermarkets already is most encouraging as we're moving into this very busy period of the year as we go through Christmas, where we have to move an enormous number of goods in order to meet our customer demand. I'm anticipating that in the couple of weeks leading up to Christmas, we might move 3 million cartons a week through that Redbank facility that you just saw the video of. So hopefully, it will also deliver long-term benefits to shareholders. I now turn to the formal agenda, items of business at today's meeting.
The notice of meeting sets out information regarding items for consideration. I will introduce each item of business separately and then invite questions and comments for that item. At each instance, to best manage the interface between the questions in the room and via the Lumi platform in writing and verbally, I will first ask for questions from the floor. I will then address questions received via the Lumi platform, first addressing those in writing and then those from the audio facility. Sally Fielke, our General Manager, Corporate and Indigenous Affairs, will introduce the questions received via the Lumi platform. For items two to five, following discussion, details of the proxies and direct votes received for that item will be shown on your screen and handset. I will then ask shareholders and proxy holders to vote on the item, noting that you may have already done so.
As set out in the notice of meeting, I intend to vote all available undirected proxies held by me, as the chairman of the meeting, in favor of items two to five. If you leave the meeting early, please ensure you have submitted your votes. Voting on all resolutions can be done in advance via your handset or online at any time until the poll is closed, immediately before the conclusion of today's meeting. Tim Huon of Computershare will act as the Returning Officer for the poll and will oversee the counting of the votes. The final results will be made available after the meeting to the Australian Securities Exchange and will be displayed on our website.
I now turn to the first item of business, which is to receive and consider the financial report of the company and its controlled entities, and the reports of the directors and auditor for the year ended 25 June 2023. These reports were included as part of the annual report and published on our website. While there is no requirement to put this item to a vote, this is an opportunity for shareholders to ask questions relating to the company's financial report and the reports of the directors and the auditor. Mr. David Shewring, representing the company's auditor, Ernst & Young, is available to answer questions in connection with the audit. I would now like to invite questions or comments from shareholders regarding the financial report of the company and the reports of the directors and the auditor.
The text of this first item of business is shown on the screen. Before I take questions from the room regarding this item, I note that we received a question from a shareholder prior to this meeting, which has been addressed to the auditor. The question is: Can the auditor please outline the audit procedures performed to address the risk of underpayment of employees and the results from these procedures? Before I invite David Shewring to respond, I would like to note that since this matter first came to our attention in late 2019, it has been the subject of significant focus by both the board and senior management, supported by significant amount of external assistance. The board receives regular reporting on this issue, which is overseen by a management steering committee, including the Chief People Officer, the Chief Financial Officer, and the Chief Legal Officer.
I will now ask David Shewring to address the question.
Thank you, James, and thank you to the shareholder for the question, which we received in advance, which has allowed me to prepare a few notes. Payroll is a significant audit process, and further to the chairman's comments, we review the board reports of the Coles payroll compliance team as part of our risk assessment. Our audit approach then includes testing payroll controls, including employee pay rates, rate changes, and pay run approvals. We also then perform tests, including analytical review and testing employee entitlement balances. Compliance with laws and regulations is a company matter, and under auditing standards, we're required to perform procedures to identify non-compliance that may have a material impact on the financial report.
As such, for remediation provisions for salaried employees under the GRIA Award, which are disclosed in note 6.2 of the Coles financial statements, we audited the provision and the remediation payments. We also interviewed Coles personnel and advisors and held discussions with the board. We do not provide an opinion on individual payroll accounts or provisions, but rather our opinion is on the Coles financial statements as a whole, which is unqualified. Thank you.
Thank you. Thank you very much indeed, David. I would now like to invite any questions from the room regarding the financial reports of the company. Microphone one.
Mr. Chairman, I'd like to introduce Mr. Reid.
So my name is Mike Robey. I'm from the Australian Shareholders Association, and, today, I hold, which is a not-for-profit, standing up for all retail shareholders, not just members. Today, I hold proxies, which make us, I think, the 16th, largest, member on your, on your list of companies, so we have a significant, customer interest. Could I start by saying it's very gratifying to see, a board which basically looks reasonably gender balanced, which is one of our guidelines? So that's a very nice thing to do. To see you following Telstra's rule, where basically an internal candidate takes over from the CEO, and that internal candidate, just like Telstra, was, was female. So it's nice to see you pushing the boundaries there. Well done.
Now, my first question is really about the online business, and I say it because it's of interest to shareholders because your CEO is actually assessed against the performance of online. Therefore, it has an impact on shares if she does or doesn't make it. But my question is: What's the future, the online future? I mean, I know there was a rush of blood to the head for most retail companies during COVID, where everybody went online. But what's the future, and what are your targets over the next few years, particularly as the split? And we do note the cost overruns and the time overruns in getting your current targets. I have two more small questions. If I should do them now, or?
Why don't you-
Move on.
Do they relate to this item?
No, they don't. No.
Well, why don't we-
Great. Okay
... handle this item set first, Mr. Robey? Thank you very much for your opening comments. And thank you for also drawing our attention to the importance of online. Our business has grown dramatically in online, and as you noted, the impact of COVID really put the accelerator down on that opportunity. And we have seen substantial development of our online engagement across home delivery, click and collect, click and collect rapid, where you can have your goods available in 90 minutes, same-day delivery, same-day delivery assisted with the support of some delivery partners. And our ambition is also to have the best online home delivery, next day delivery service, using the Ocado facilities, to which I referred earlier. The online business has grown worldwide as a material part of supermarket operations and liquor operations.
And we have seen, as Leah referred to in her report, material growth continuing in this first quarter of a new financial year, with 25% increase in the supermarket's online business and some 32% increase in the liquor online business. It's quite interesting, though, when you look into the detail of the online customer. We find that, in fact, the most substantial and active customers for us are what we call an Omni-channel customer. That is, people who use both our online network and our in-store network. In fact, there is quite a large amount of shopping undertaken in our stores now, where the customer does research online in advance and then buys in store. But the growth of the Omni-channel customer really means that going forward, we anticipate online being a significant continuing part of our supermarkets and liquor business.
The task for us is to make sure that we're operating that service really efficiently, and that we're managing to deliver what the customer wants on time and making their life simpler. The great advantage of the Ocado facility is the perfect order rate, and it is known worldwide as the best facility for ensuring that the customer gets what they want. One of the challenges in online is that with, particularly with availability challenges, that hasn't, has been more challenging in the store-based system. That's a component part of our future. We're very positive about where online will fit. How it works out in terms of percentages is hard to say, because we are really meeting the changing preferences of our customer. What we know is, is it's important, and it's really important where we have the omni-channel customer in-store and online. Next question, please.
Microphone three.
Mr. Chairman, I would like to introduce shareholder, Mr. Guy.
Thank you. Yeah, I'm representing the Regional Trade Unions, Human Rights Shareholder Group, and the question is based around ethical, sustainable governance and procurement oversight. I guess, for instance, in 2022, IPL, or Incitec, imported phosphate from the territory of the non-self-governing country, Western Sahara, which is against UN international laws. Unfortunately, these laws are only as good as companies and countries that adhere to them. The Maritime Union sent IPL a letter expressing their concerns from workers being asked to handle such material. Western Sahara is the last colony of Africa, and unfortunately has been back at war with Morocco for the last two years, with many innocents being killed by drone attacks by Morocco.
The phosphate made into fertilizer finds its way through procurement into the Australian supply chain, such as Coles, in many ways, making Australian farmers complicit in the ongoing suffering of Sahrawis who have been under oppression, absolute monarchy. To support this, you only need to look at Amnesty International's report on the rape and torture of Sultana and Luara Khaya and her sister. Also, in 2022, Ansell was accused of using modern-day slavery in its supply chain, which Ansell Chairman John Bevan addressed at this year's AGM. Unions are still concerned with Ansell not meeting obligations to some Myanmar workers in Thailand. So I guess the question is: How deeply do you look when you're going through your ethical sourcing and procurement for Coles?
Well, thank you very much, Mr. Guy. I, I might have missed a little bit of the beginning, but I think I've got the, the essence of, of your question. You're raising the whole issue question in terms of our responsibility as a major Australian corporation buying goods. We have over 8,000 suppliers. Over 4,000 of those are in Australia, and over 4,000 are international. I should just mention that in relation to all fresh produce in Australia, we have a Australia First Sourcing policy, and 96% of all Australian product that we sell is sourced from Australia. But we have many international suppliers in goods not for resale and in other parts of our offering in our supermarkets outside of the fresh category. We have been really focused on ethical sourcing.
In fact, it was a matter brought to our attention as a newly listed Australian Securities Exchange company at our first annual general meeting, this time in 2019. The matter was raised about, are we aware of all of the, the bits and pieces that are happening in the supply chain leading up to us? Since that time, I think we have been very, very actively pursuing all elements, including where products have come from. There's been a lot of focus on products that have come from some of the Southeast Asian parts of the world, and you referred there to Thailand. We have a team of people in Australia who are assessing what is happening to team members? What is happening to product?
What's happening to worker conditions in each of the main suppliers that we have direct visibility of? It has been easier for us to do that in relation to Australia, where we obviously have on-the-spot information available to us. Globally, we work with a lot of counterparties who can provide us with better insights about practices, certainly in relation to the matter you refer to, issue of Ansell. I don't know anything about their business, but I know in relation to our own business, we have a number of rubber gloves come to Australia, and those come mainly from Sri Lanka for our Coles brand rubber gloves.
And during the year, we have deeply investigated to ensure that the worker conditions in the factory, which is supplying us with that product, are appropriate, and we've had professional assistance in making that assessment and have come to that view. I'm afraid I can't comment much about the Western Sahara. I am aware of that issue from other prior years experience. But certainly, our farmers and their farm practices in Australia is something that we manage, monitor very carefully, and we set standards which are ensuring that there are responsible behavior and responsible practices and sustainable practices across our supply chain. Next question, please. Microphone one.
Mr. Chair, I'd like to introduce Mr. Quayle, a shareholder.
Good morning, Mr. Chairman. Before I ask my question, can I just make a statement?
Please do. If it's, if you can give it relatively brief.
I'd just like to congratulate you and the board for making the decision to appoint Ms. Weckert as our Chief Executive and Managing Director. I've worked for Coles for over 40 years, and I've worked with some amazing women in that time. We've had some marvelous Managing Directors, male, but women have been excluded. In my opinion, they would have been made great executives, but they weren't given the opportunity. It's taken this board 109 years to finally get rid of the gender equality and appoint a woman, and I congratulate Leah Weckert on being now made Managing Director and Chief Executive. Thank you.
Thank you. Thank you very much, Mr. Quayle.
Mr. Chairman, my question relates to Coles Express. You indicated that the business has been sold. I live on the Bellarine Peninsula, and I drive to Geelong, and I go past the Shell service station, and there's usually no cars filling up with petrol. I go about a kilometer down the road, and there's another business that is thriving. Its price is a minimum of seven cents a liter cheaper petrol. I believe that people going past, who are currently competitors of Coles, will look at that and say, "AUD 0.07 a liter? I don't believe Coles are really concerned about being competitive if they can't get the price right for petrol." Mr. Chairman, when are we gonna take the sign down and forget about Shell's Coles Express now that we no longer own it?
Well, thank you very much, Mr. Quayle. That's a very relevant and good question. There are some 711, I think was the number, of Coles Express service or convenience store and service station outlets at the time of sale. When we entered into that arrangement, we entered into an agreement to make sure that business would continue in an uninterrupted fashion. That meant that, as I mentioned earlier, some 6,000 of our team members moved across to Viva Energy. We entered into a product supply arrangement, which meant that we would continue to be able to provide the convenience store product range that Coles had built up over its period of engagement in the business. We ensured that Coles customers would still be able to get the AUD 0.04 a liter discount and that the Flybuys program would continue.
One of the challenging issues was we need to rebadge the Coles Express network, and we, like you, realize the importance of being able to do that sooner rather than later. The there is no disagreement, in fact, there is an agreement to make sure that that does happen. But you can imagine when you've got more than 700 outlets all across Australia, all requiring quite amount of amendments to their presentation, that that is going to take a little while. And so it will. I think you will see it start to accelerate, but it's, it's obviously under the control of Viva Energy, but there is a contractual requirement to deliver it within a timely period, having regard to the enormity of the task.
And I hope that that will mean that this time next year you will perhaps have less disquiet than you may have this this year.
Thank you, Mr. Chairman.
Microphone three.
Mr. Chairman, I would like to introduce shareholder, Mr. Shembry.
Hi.
Mr. Shembry.
Hi. Thanks for the opening address and for the results. It's always good. I too am very pleased to see a lot of women up there. I would like an assurance, however, that gender actually plays no part in the appointment of anybody on the board. Can you just clarify for us? Just give us an assurance about the priority of merit over the pursuit of any DEI agenda.
So- When I see a woman up there, I don't care if she's a woman or a man or whatever. The only thing I care about is that, that person is the most qualified person for the position. Now, that's the presumption that I have as a shareholder. Just want a clarification and an assurance that that is in fact the case.
Well, thank you very much, Mr. Shembry, for your question. I think what we have done is to recognize that when we look at the selection process, the process rather than the ultimate final decision-making, we work hard to make sure that we have looked very extensively across whatever is the relevant audience of, of potential persons, and made sure that we proactively think about it, gender balance, in who might be in the possible catchment group in order to identify the right outcome. But we always make sure that the appointment we make, when we filter it down and we get down to a shortlist, we always make sure that the person who we're appointing is the right person.
But I think unless you start with a wide commitment to the funnel being wide open, and you work diligently to make sure that you've sought to see, are there opportunities that we've got gender balance? Then we can move forward from that. And if you look at the people on this board, every person on this board has some outstanding commercial characteristic and great interpersonal skills and great judgment. Each one of them meets the high bar benchmark that you're referring to, and it's the same in our management team. But unless you start with a focus of being committed to seeking to make sure that, to the maximum extent possible, we are totally gender neutral, you may miss a trick, and we're trying to make sure we don't.
Thank you. I'll take that.
Microphone one.
Mr. Chair, I'd like to introduce Miss Neslaw.
I'm sorry, I missed your name.
My name is Diane Neslaw.
Thank you-
Okay
Ms. Neslaw.
Neslaw. I have two questions. First question is, and maybe it's just where we shop in Southland, but we can't seem to obtain Coles frozen chips anymore. Of Coles label. So that, yeah, it's not, it's not very important, but it's just something I want to ask. And the second question is, why is it that the discount card is now no longer being able to be used for petrol, for the people who work at Coles?
Ms. Neslaw, I think these-
Neslaw.
Neslaw.
It's a hard one, I know.
These are somewhat operational questions that I'm gonna invite the Managing Director and Chief Executive to respond to.
Good morning. Thank you for your question. There certainly have been some challenges over the last 12 months in relation to frozen potato products in general, which actually relates to the crop that we had over 12 months ago. So we have seen shortages in the frozen potato chips over the last 12 months. Pleasingly, that is starting to improve now. So my hope is that when you go into Southland over the next few months, you should start to see that situation become better from an availability perspective.
We do have other chips like McCain's, but we just don't have Coles label.
Yes. So, our own brand label products—they come from a different supplier to McCain's. And what we have found is they just have not been able to supply them to us over the last 12 months. But as I said, that situation is improving now, so you should see the availability start to lift. With regards to the discount card, since we have now sold Coles Express, and that is no longer a part of the group, it is no longer covered by the discount card for team members. So it's simply that it's moved outside of our ownership and over to Viva Energy.
Are there any further questions in the room? Microphone one.
Sorry, Chair. I'd like to introduce a shareholder, Mr. Donahue.
Hi. Just, been having chats occasionally with our duty managers in store, and I'm hearing that the incidence of theft is quite on the rise, considering the cost of living problems nowadays. I'd just like to understand what initiatives Coles are putting in place to combat the increase in theft in stores.
Thanks, Mr. Donahue. It is a significant issue, and it's not only in Australia, it's actually a global issue at this time, that there has been an increase in loss or theft. This was actually called out in August, at the time of our release of our full year results for last year, noting that it had increased materially over prior periods. I think we all would agree with your assessment that it relates to the current state of global market conditions, impacting cost of living. We have embarked upon, with a matter of urgency, a number of initiatives to address that. What we're really relying upon as the sort of the primary way is enhanced technology, which detects and prevents or interrupts the potential theft.
In some high-risk stores, we've had to put physical presence from security persons in the stores. Obviously, that's something which you would prefer not to do, but it is a necessary component part of protecting the assets of the business. We have looked at some issues regarding the range, because there are clearly some items which seem to be more popular for being removed from the store unpaid. But there are some challenges, but we feel that we're making pretty good progress. Certainly, our team members are more than well focused on this issue at the present time in store, and we're hopeful that by the end of this calendar year, 250 stores will have rather enhanced technological solutions to address this issue. We think that will be quite material.
It's a regrettable position, but it's one which, as I say, we're seeing internationally as well as domestically. Any other questions?
Thank you for that.
Microphone one.
Mr. Chairman, I would like to introduce Mr. Fred Cornelius, shareholder.
Morning, Chairman and board. My thing is, once again, products, like one of your previous callers. I find that when I go to the stores, the cheaper brands seem to be empty and sold out. Now, before you tell me, because they're cheaper, they're gone, I would say that... and the more exotic brands are available. I would say I get there pretty early, and they're either empty, not shelved. Now, either you're deliberately not filling them to force us into the exotic ones, or you're inefficient in not having enough supplies to replace them. That's the first question. Second one is, once again, to come to a specific product. I used to go to Coles, and I used to buy things like lamb fry and certain pork products, which seem to be not available there anymore.
While I like the convenience of shopping in one spot, as a shareholder, I would like to spend my money in Coles. I now have to go to a competitor to get these items. Can you please look into that?
Well, Mr. Cornelius, thank you for the question you raised. I do want to stay away from individual customer requirements, but the point you raised about availability of product more broadly is one which is very much being on the focus of the management team and the board over the recent past. Since the COVID period arose, availability was significantly disrupted during that period, and it has not come back to pre-COVID levels. Sometimes there are domestic issues that may impact because of a seasonal factor or a flood or a bushfire or some issue which has interrupted the supply chain. But there are restrictions in terms of how we can go about ensuring availability meets the levels that we previously achieved.
Now, we are very focused on getting there, and I'll ask the Chief Executive to make a couple of comments.
Mr. Cornelius, I'm, I'm disappointed to hear about your experience. That is definitely not what we want for our customers when they come in store. As the chairman has said, we have had quite a number of supply chain challenges over, over the last 1218 months. That is really starting to resolve itself now, and so our availability, if you compared it to the same time last year, on many products, is a lot better this year than it was. I'd be very happy to catch up with you over a coffee straight after the meeting, and if you would share your store, we can definitely have a look into those couple of poor products in the lamb fry, and see whether we can indeed range them into store for you.
Thank you. I have one more question, if that's allowed?
Yes, Mr. Cornelius.
Sometimes you go into the store, and not everybody, including me, likes to use the automatic checkout electronic machines. There's sometimes a queue of six or seven people with only one staffed cash register. I find that not appropriate.
Well, Mr. Cornelius, the unavailability of checkouts where we're using the customer to participate more in the checkout than the belted line that you're, I think, referring to has been something which has developed as part of our overall efficiency, and many customers actually prefer to have the self-checkout facility. What should be happening is that if there is an issue of build-up on the belted checkout or the mainline checkout, you should be seeing a team member coming to assist you. But maybe the... Was there anything that you wanted to add to that, Leah?
So, we would be very happy to open a checkout for you if you would prefer to use a manned checkout. So I would encourage you just to approach someone in the service area and ask them if they are able to do that. We definitely know that different customers prefer to check out in different ways. We have customers who like the ability to quickly go through the self-service and not have to interact with someone and not have somebody else pack their bags. They would quite often like to pack it the way they like it. But equally, we know that it's very important to other customers to be able to go through a checkout and have someone complete that activity for you and pack your bags, and sometimes have a nice chat as well.
So, I would encourage you to just, reach out to the service member in store and ask whether they would open the checkout, and, hopefully, you will encounter delight in doing so.
Thank you. I know I'm a dinosaur, but that's the way I am.
Okay, thanks, Mr. Cornelius. Next question, microphone three.
Mr. Chairman, I would like to reintroduce shareholder, Mr. Guy.
Yes, Mr. Guy.
Thank you. So Regional Trade Unions, Human Rights Shareholder Group, we'd like to commend Coles for supporting the Yes vote and Coles program for Indigenous employment and reconciliation. Australian Council of Trade Unions survey indicated that 67% of union members did vote yes. So part of the Coles community social responsibility, seeing that Coles don't mind me going down that line, there was a recent polling of 75% of Australians supporting the whistleblowers and being Julian Assange, and about 60 voices across party parliamentarians. So will Coles join in this call for the freedom of Julian Assange?
The second part of that, I guess, is, in recent years, many big businesses and ASX 50 companies have been, have taken public stances on issues like climate change and social justice causes, such as the 2017 marriage equality vote. Will Coles join the growing voice for a ceasefire to be held in Gaza and the humanitarian corridor to be opened and stop the weaponizing of food, water, and medicine to all peoples everywhere?
Well, Mr. Guy, thank you for your question. I think the situation which existed in regarding our engagement and support for the Indigenous team members and the commitments that we have made over the 15-year period were rather distinctive in the operation of Coles and what we saw the future well-being of Coles. We do not feel it is our right to interfere into the wider political arena, other than where it relates directly to our team members, our suppliers, our customers, as customers of Coles in that capacity. We have a policy at Coles that we do not contribute to any political party. We would maintain a very independent, neutral position. And whilst as individuals, we may all share very significantly passionate views, one way or another, on different matters that emerge from time to time-...
That is a separate matter to the position that we adopt, reflecting the interests of our business as a whole going forward. I don't think we would be entertaining the matters to which you've referred going forward as falling within our charter. Are there any further questions in the room? Otherwise, I'm keen, Sally, to see whether there are any questions online.
Chairman, we've received a number of online questions, with the first question from Mr. Ian St. Vincent, who asks: Given the comments from the CEO around the various Flybuys promotions, especially the cookware promotion and now the barbecue accessories promotion, I'm concerned about the reputational damage to Coles because of the continual short supply of the rewards in the past. The last promotion caused a great deal of damage, where customers were collecting points for the last three weeks of the promotion when all stock of items was actually exhausted. Customers lost points and were unable to redeem the rewards. Why does Coles not at least carry over points to the next promotion when this happens? I'm aware Coles have lost many customers as a result of this issue.
Well, thanks very much, Mr. St. Vincent, for your question. It really hinges around the way in which, and the importance of collectible campaigns in our business. And, as you rightly referred to, our current Curtis Stone barbecue range collectibles, which is very, very active in our stores as we speak, is front of mind with many customers. In terms of the particular matters that you refer to, I'm going to pass over to the Managing Director and Chief Executive to respond.
Thank you for your question, Mr. St. Vincent. So as I mentioned in my opening remarks, we did have over 1.1 million households participate in the MasterChef collectible campaigns last year, and we know that the customers that redeemed products have been very pleased with them. We are clear in the marketing that the promotion is a while stocks last program, and that the credits that you collect only apply to that specific program. But that being said, we never want a customer to be disappointed and not able to redeem their credits for products. And on the back of the experience we had with the MasterChef cookware, we have significantly increased the amount of stock that we have for the Curtis Stone barbecue range. So I'm very hopeful, Mr. St. Vincent, that, this time around, you will be able to, to get the products that you are after.
Sally, are there any further questions online?
Yes, Chairman. The next question comes from Mr. Steven Main. It is directed to Mr. Terry Bowen, and he asks: Thank you to Terry Bowen for his 12 months of service on the board ahead of resigning next February to take up an executive position in New York. It is always helpful for investors to have access to some expert perspectives from retiring independent directors, especially from someone like Terry, given his long association with the business via Wesfarmers. In his final AGM contribution as a Coles director, could Terry please comment on where he sees Coles positioned relative to Woolworths and Aldi, and what he regards as the best decisions made about the Coles business during his association with the operation? Does he have any regrets?
Well, thank you very much, Mr. Main, for your question and for your recognition of the significant commercial acumen of Mr. Terry Bowen. And as I mentioned in my opening address, Terry, having had the benefit of being the finance director some 15 years ago inside Coles, has been able, over the last period of time whilst he's been on the board, and we still look forward to that continuing through until late in February, to provide particular insights and contributions. It will not be the practice of this board to be seeking independent directors to make comments about the operational performance of the business. The operational performance of the business, to the extent that you have questions, Mr. Main, should be addressed to myself, and if appropriate, I will seek the participation of the Managing Director and Chief Executive in responding to it. But thank you for bringing to everyone's attention the important role which Terry Bowen has played as a director and a person of significant commercial standing in the Australian community generally.
Chairman, the next question also comes from Mr. Main. How many of the Coles directors live in Melbourne, and how does it work having an interstate chairman? Wouldn't it make more sense to have a Melbourne-based chairman? And how many more years is our current chairman intending to stay in the role?
Well, first of all, I think the location from which a director resides, in today's world, Mr. Main, is really somewhat incidental. We are all used to being able to be very mobile, both physically and with the assistance of Zoom and WebEx and Teams, being able to participate in terms of the affairs of the company, daily, weekly, monthly, or on whatever basis may be required. There are enormous number of opportunities where we are all collectively together. There are occasional meetings where they happen at short notice, and for whatever reason, it will be more convenient for those meetings to take place using the video network. As far as I think it, it's a bit in relation to the question I was asked earlier.
I think we make sure that the people on the board are the best possible people that we can identify at the time, in order to continue to operate Coles as a strong, proud Australian business, with a, with a commitment to doing the right thing internally and externally, and performing for its shareholders. As regards my own position, Mr. Main, you may recall that, at this time last year, when I stood for the re-election as a director, I indicated at that time that during the ensuing three-year period, I would anticipate retiring at the appropriate time.
As you can see, the main focus at a board level over the last year has in fact been to make sure that we were able to have the seamless and very smooth transition of CEO, and also to commence the process of board renewal, which we have seen. It's fantastic to have Scott Price on the board, a person whose understanding of global retailing, global logistics, is so helpful to everyday understanding of our business. Scott happens to live in Hong Kong, but that is never an issue in terms of his availability and participation. Terry Bowen, as you were referring to earlier, is actually Perth-based. Jacqueline Chow, Richard Freudenstein, and myself are Sydney-based. Abi Cleland, Wendy Stops, are all Melbourne-based, and our Chief Executive is also Melbourne-based.
It works pretty well. Our job is to make sure it continues to work that way. Are there any further questions?
Chairman, the next question comes from Mr. Robert Crone, who asks: Who is required to pay for Coles Express rebadging to Reddy Express, Viva or Coles?
Very good question, Mr. Crone. I'm pleased to say, with my finance director sitting right in front of me, confirming the way in which this contract was negotiated, was of course, it is Viva Energy's obligation to pay for that.
The next question comes from Mr. Brendan Wilkinson: Has the increase of self-service checkouts versus staff checkouts been a factor in the increase in theft from Coles stores? And are there specific actions that Coles is undertaking to address this?
Thanks very much, Mr. Wilkinson. I think I made a number of comments earlier about what we're doing to address it. There is no one single fix for this issue. There are challenges, depending upon what are the particular characteristics of the customer at the time. What I would say is that our team member engagement at the checkouts is very, very alert to the risks that we have been facing. The technology that I referenced earlier is being installed at pace, and that by the end of the year, we'll have at least 250 of the most at-risk stores with that new technology. There is a lot of focus from those people who are working inside the store making sure that most...
Nearly everyone does exactly the right thing, and it's just unfortunate we have to be alert. But all of our team are very alert and very aware of the importance of this issue at this time. Any further questions, Sally?
Chairman, the next question is on a similar topic from K Super Proprietary Limited, as trustee for the Crown Super Fund. Do you acknowledge operational tardiness in closing manned checkouts without sufficient risk management of self-service checkouts, leading to significantly higher stock losses than competitor Woolworths? Are you now confident this weakness has been rectified and stock losses have normalized?
I don't intend to discuss the performance of any particular supermarkets else, other than that of Coles. I think I've tried to say that we are very on top of the importance of this issue. We are moving ahead at pace to ensure that our technology, our training, our risk management internal systems, are such that we can, to the most extent practicable, address this issue. But there will be initiatives that we will take, and I'm sure that will emerge as new opportunities to make sure that we protect the business and the assets of Coles Group Limited going forward. And that will be brought to our attention as new areas of opportunity emerge, new ways of operating emerge, new systems emerge, but we are very focused on addressing this issue at this time.
Chairman, the next question comes from Mr. Steven Mayne. The chair rejected multiple transparency requests at last year's AGM. No AGM transcript and no reporting of the voting results, like with the scheme of arrangement. Could he agree to get with the best practice transparency program and disclose the proxy position to the ASX, along with the formal addresses at next year's AGM, and also follow the recent lead set by the ASX itself, which released voting results by shares and shareholders? On this remuneration report, it will potentially show that more small shareholders voted against than in favor. Why not disclose this, given that the share registry has the data, and will such disclosure stimulate increased participation in voting in the future? The current system has led to voter turnout plunging to less than 5% because we all feel swamped by the big shareholders.
What is the point of small shareholders voting?
Thanks, Mr. Mayne. And the fact that you're bringing to our attention how we, as a major Australian corporation, should think about good corporate governance is something which I appreciate, because we do have a responsibility for good corporate governance. And we do address what's going on inside and outside our business to make sure that we are meeting those standards. You are quite correct in reminding me and our shareholders that this matter was brought to our attention last year. I don't think our position has changed in relation to the responses that I provided last year. That is, we are very conscious of moving with the market environment to make sure that our best practice is preserved, we meet the requirements of the Australian Securities Exchange, we meet the requirements under the Corporations Act.
What we're not suffering from, Mr. Mayne, you're not here with us in Melbourne, but I am pleased to say that we are well represented by as shareholders, who hopefully feel that it is valuable to come to participate and to vote. We welcome the support of all shareholders and the views of all shareholders as we seek to progress the business of Coles Group Limited.
The next question also comes from Mr. Mayne. The Retail and Fast Food Workers Union is providing competition to our traditional union, the SDA, and have been in the media recently and have turned up today working with the Victorian Greens. The likes of Domino's and JB Hi-Fi have no union agreements and virtually no union membership amongst team members. Why are we so different? Could the CEO summarize the number of union agreements we have with the SDA, and provide an estimate on the percentage of our workforce which are members of the SDA or its new competitor, the RAFFWU?
Mr. Mayne, this is a question which I was not actually anticipating from yourself, but I'm happy that you brought it forward. We have 120,000 team members who make up the Coles business. The, by the way, the vast majority of those are team members who work in stores, who are likely to be included under the SDA, the Shop, Distributive and Allied Employees Association. The RAFFWU, the Retail and Fast Food Workers Union, to which I think you were referring at the opening of your question, a very small component part of our team members. I think approximately 500 members of our team are members of RAFFWU. We negotiate with all team members and all team members' representative bodies throughout the operation of our business.
We currently are engaging in terms of the next round of opportunities ahead for the way in which the business is organized under the Enterprise Agreement. To extent that any team member or representative body comes to us, we will enter into those discussions in absolute good faith to try and ensure that we come to a really positive and supportive outcome. Because we need to have positive and supportive relationships with our team members in order that we can conduct our business in a way which we're proud of and our customers enjoy and feel comfortable with. We actually do surveys twice a year in terms of how our team as a whole feel about Coles Group Limited. Pleasingly, we are constantly seeing an increase in the level of what we call team member engagement.
That is, the people feel comfortable, confident, proud to recommend Coles, and I think this is a positive sign. But there will inevitably be issues with every set of discussions when it gets down to the best basis going forward for the next period of time, and we'll work those issues through with whoever are the appropriate representatives, whether it's RAFFWU, SDA, the National Union of Workers, or whoever it may be. Next question, please, Sally.
Chairman, we have another question from K Super Proprietary Limited, as trustee for the Crown Super Fund. On a similar topic already raised, are you now confident abnormal stock losses from theft have now normalized?
Thank you very much. I'm sorry I don't have your name. I only have K Super Proprietary Limited, but, thank you for your question. I think as we said, both, in August, at our full year results release, last week, when we released our results of terms of sales results for the first quarter of this financial year, that this is something which we are moving ahead, introducing the different systems and technology at pace, and that we are aiming to have at least 250 of the most at-risk supermarkets in the best possible structure that we can provide, by not later than the end of this calendar year. So there is an element of work in progress, but as I said earlier, this is a matter of significant focus company-wide. Are there any further questions, Sally?
Chairman, there are no more online questions or comments on this item. However, I understand there is one additional question from the floor at microphone one.
Thank you. Microphone one.
Mr. Chairman, I would like to reintroduce Mr. Mike Robey.
Thank you, Mr. Robey.
Mr. Chairman, we talked about this prior to the meeting, but in a market dominated by the major retailers, Coles Liquor has shown very low or no growth and has been a distinct market underperformer, which in a two-horse market is not particularly good score. Can you advise what steps have been taken to address this, and is divestment and therefore return of capital to shareholders an option?
Thanks very much, Mr. Robey. Firstly, just so shareholders are aware, in the financial year ending June just past, the liquor division contributed to what we call EBIT, which is Earnings Before Interest and Tax, some AUD 157 million. As we have noted, the comparative sales of liquor, when you look at pre-COVID, COVID, and post-COVID periods, hard to manage. But what you can see is that sales in our liquor business in the last half of the immediately past financial year and in the first quarter of the current financial year, are pleasingly continuing to grow. But that growth, and Mr. Robey, this is slightly different to what you were suggesting.
Over the last nine calendar quarters, we have outperformed in terms of market growth, and so we actually see that the liquor business is becoming more important in the marketplace. In terms of your wider question, which is really a portfolio question of, so where does liquor fit? If you look at retail businesses of our kind around the world, you will find that most of the large, successful supermarket retailers have, within their portfolio structure, the sale of liquor. And I think that this is something which is quite an advantage for us in Australia, that we continue to have liquor and our food business together, because we can make sure we're delivering for customers better. Clearly, we get more feedback, more information from customers in terms of what they want and how we can better deliver going forward.
So, one never says, well, don't say never, to any proposal, but I think there is no current prospect of the liquor business being other than material contributor to our group. Next question I see is microphone three.
Mr. Chairman, I would like to introduce shareholder Ms. Emily Cross.
Actually. I would like to congratulate the board on your sustainability report. I am very impressed. So congratulations for that. The Kitchen Garden Foundation, with Stephanie's involvement and the SecondBite programs, are things that interest me very much. So I have a question for you. I'd like to know more about the SecondBite program and how the food is distributed, et cetera, because I'm thinking of getting involved. So could someone elaborate on it, please?
I, Ms. Cross, if I may, I'll give you a brief answer now and suggest that there be a follow-up discussion, perhaps with Brooke, who might just stand up for a moment so that Ms. Cross could identify you at the conclusion of this meeting. Our arrangements with SecondBite have been now, I think, since 2011, and over that period, we have built up an extraordinary partnership. Every one of our supermarkets and distribution centers has an arrangement whereby any edible food that we have inside our supermarket will not go to waste, but will go to collection structure organized with SecondBite.
SecondBite then take it to a center which is regionally relevant to them, and they then work with, as I mentioned in my opening address, 1,100 different charities around Australia, and those charities then provide the food and the meals to Australians in need. It's been a remarkable success. Over 35 million meals provided through SecondBite last year, and I'm sure Brooke would like to catch up with you with more details at the end of the meeting.
Thank you.
Are there any further questions in the room? Are there any further questions online, Sally?
No, Chairman.
So we will now move to item two on the agenda, which relates to the re-election of Ms. Wendy Stops as the Director of the company. The text of the resolution is now displayed, and Wendy's details are set out in the notice of meeting. Wendy has been a Coles Group Director since our demerger in 2018, and brings to the board considerable commercial experience gained as a senior executive and non-executive director, including extensive involvement in the areas of digital and information technology, both here in Australia and overseas. Wendy is a member of the group's Audit and Risk Committee, and I would now like to invite Wendy to address the meeting.
Thank you, Chairman, and good morning to all those here today. No, good afternoon to all those here today and watching online. I'm extremely pleased to be standing for re-election to the Coles Board after joining five years ago, as James said, at the demerger. Since that time, I have served as a member of the Audit and Risk Committee and the Nomination Committee. The skills and experience I bring to the board, I outlined three years ago, still hold true today and have been enhanced by my experiences on both the Coles Board and other board and panel roles, including the boards of the Commonwealth Bank of Australia, Altium, Blackmores, the University of Melbourne, and the Melbourne Business School Centre for Business Analytics.
Also the AICD's Technology, Innovation and Governance Panel, and the Federal Government's Digital Experts Advisory Panel as part of its digital task force. Those skills and experiences, which I believe are most relevant to Coles, are predominantly in four key areas. Firstly, information technology, process improvement, and large-scale program management with a professional services career over 30 years in information technology across a breadth of geographies and industries. Secondly, digital and data analytics. Both my executive career and my involvement with the Melbourne Business School Centre for Business Analytics and other expert panels enables me to bring insights into how to use data analytics and AI to drive business decisions and how to enhance broader digital experiences for our customers, team members, and suppliers. Thirdly, operational management and risk management.
Being very conscious of how to run a business and be risk-aware as a result of seven years in COO and global risk management roles during my executive career, combined with the many complexities and challenges of corporate operations and risk management that I have gained through my NED career. Lastly, leadership, people management, and cultural challenges. I was part of a global organization that grew from small beginnings into a very large global organization. As that organization grew, my skills and experience in these dimensions, particularly throughout Asia Pacific, also developed, today, providing me with valuable learnings and insights that I am able to bring to Coles. I hope to be able to continue to bring these experience and skills to Coles with your ongoing support for my re-election.
I'm very proud to be a member of this great Australian iconic institution that is working hard to help Australians eat and live better every day. Thank you.
Thanks very much, Wendy, and Wendy is a great participant on the board. I feel like I'm very lucky to be able to be the chairman of a company with so many wonderful contributors, both at board and senior management level, and an absolute delight to have Wendy on the board. The board, with Wendy abstaining, unanimously recommends the re-election of Wendy Stops. I would now like to invite any questions that you may have on this item of business. Are there any questions from the floor? If not, are there any questions online, Sally?
Chairman, we've received an online question from Mr. Steven Maine, who asks: "This question isn't about Ms. Stops per se, but relates to board election issues more generally. Why wasn't Andy Penn recruited and announced earlier, so his appointment to the board could have been endorsed by shareholders today? Instead, he will serve more than 12 months without endorsement. Could Andy Penn and the Chair comment on the recruitment process that led to his appointment to the board? Was a headhunter involved? Did the full board interview Andy, and did they interview any other candidates? Did Andy know any of our directors before engaging with the recruitment process?
Mr. Maine, as you correctly point out, your question doesn't relate to the agenda item, but I think it is a reasonable question that shareholders might wish to know, understand. So despite the fact it's outside of the agenda item, I will make a response to it. In order to attract and make sure that we've looked comprehensively at the opportunities for us to add to the board and to move forward with board renewal, which I referred to earlier.
The board commissioned an independent search firm, with whom we had previous experience in a very positive way, to undertake a search for us, with the aim of trying to find a person who had wide commercial skills, with an understanding of the complexity of big companies, who would bring a contribution in areas which were helpful to our wide market activity. We were quite conscious of the opportunity to further build on people who understood technology and the areas in which that could lead enhanced customer opportunities going forward. I forget how many people came up on the original search list, but it was probably over 100 people. The board appointed a subcommittee of three members of the board, including myself, to work with the external search consultant. We did that work.
We narrowed it down to a shortlist. We brought the shortlist to the full board's attention. We discussed the merits of the different persons. We then focused on what we thought was potentially the best way forward. Andy met every one of the board members, and that was part of our due diligence and part of his due diligence. And I think it's a very strong process that we have gone through, and we are absolutely delighted that he will be able to to join us on the 1st of December. And as we said in our Australian Securities Exchange announcement last week when we made the announcement, Andy will stand for election at the first annual general meeting following his appointment, which is next, on the 1st of December.
That annual general meeting will be our annual general meeting, at which I would anticipate being in and around November of next year. If it had been possible to have expedited the process so that, before the notice of meeting went out, with all the particulars of what was going on for the purpose of this agenda today, we would have been delighted to have achieved that. But there's quite a detailed process that we go through in order to do appropriate verification once we are close to making an assessment of the next person to join the board of Coles Group Limited.
In our particular case, because of some there are some licensing requirements in some states where independent government bodies have to approve the office bearers on the board of Coles Group Limited, it wasn't possible to reach that position until last week, which was well after all of the data that is required under the Corporations Law to go to shareholders well in advance of the meeting, had all been sent. It was not possible to advance the timetable. We hope that everyone will be delighted to see Andy's participation on the board of Coles Group Limited, and we certainly look forward to his engagement over the period leading up to next year's annual general meeting, at which time he will stand for election. Are there any other questions, Sally?
Thank you, Chairman. There are no more online questions or comments on this issue.
I'll just check that there are no further questions from the room.... there are not, which means I think we've now finalized discussion on this item. The details of the proxies and direct votes received in relation to this item will now be displayed. Please, can I ask you to enter your votes for item two if you have not already done so? I now turn to item three, which is an advisory vote on the 2023 Remuneration Report. The Remuneration Report can be found on pages 60 to 78 of the 2023 Annual Report. I'd now like to invite Richard Freudenstein, as Chairman of our People and Culture Committee, to speak to the meeting about this item.
Thank you, James, and good afternoon, everyone. The Coles Executive Leadership Team is rewarded through the payment of benchmarked fixed compensation. A short-term incentive based 60% on financial measures and 40% on strategic measures, and a long-term incentive dependent on the performance over a three-year period. This structure is designed to ensure remuneration of the group is market competitive, performance-based, creates long-term value for shareholders, and is fit for purpose. The board maintains discretion across all remuneration aspects to ensure that outcomes are appropriate in the context of our performance and the expectations of our shareholders, customers, team members, and the community. For the 2023 financial year, despite challenging market conditions, the executive team drove sales growth that led to market share gains in both supermarkets and liquor, as well as group EBIT growth.
As the chairman noted earlier in his address, the 2023 financial year was also a year marked by many strategic achievements designed to grow long-term shareholder value. The short-term incentives payable to executive KMP for the 2023 financial year range between 62.1%-73.4% of the maximum opportunity. The board determined to exclude the Coles Express sale and transaction impacts from the short-term incentive calculation as the targets were approved, the approved targets were set prior to divestment. If the board had determined not to exclude those impacts, the short-term incentive outcomes for the executive KMP would have been higher.
For the Managing Director and Chief Executive Officer, the short-term incentive payable was equal to 66.2% of the maximum opportunity, noting that this represented 10 months of performance related to her role as Chief Executive Commercial and Express, and two months in the role of Managing Director and CEO. This is the lowest short-term incentive payment as a percentage of maximum opportunity made to the incumbent Managing Director and CEO across the last four years. The 2021, 2021 financial year long-term incentive, which covered performance between the 2021 and 2023 financial years, vested on 30 August 2023. Performance is measured against two equally weighted metrics, being cumulative return on capital and relative total shareholder return. This year, 50% of the performance rights allocated to executive KMP vested.
All performance rights allocated to the cumulative return on capital metric vested, as performance was 109.3%, exceeding the stretch target of 105%. This result also excluded the Coles Express sale and transaction impacts, which did not change the vesting outcome. No performance rights allocated to the relative total shareholder return metric vested, as performance was below threshold at the 38th percentile against the comparator group. During our engagement ahead of this annual general meeting, I would like to acknowledge that we did receive some feedback as to how the targets are set, as to whether these targets provided sufficient challenge.
When setting targets for incentive plans, the board considers many things, including alignment of the targets to our strategy, risks framework and commitments made to shareholders, delivering strong earnings through the business cycle and ensuring strong, sustainable returns for shareholders, macroeconomic conditions, as well as the market, competitive environment, and consumer and retail trends, and finally, striking the right balance between achievability and an appropriate level of stretch. The board considers the outcomes for both the short-term incentive and long-term incentive to be appropriate, considering the rigor of the process by which targets were set and the financial performance and strategic performance delivered by management in the 2023 financial year. That being said, the board welcomes feedback from shareholders and will consider any issues raised, including any enhancements to our disclosure going forward.
Within the 2023 Remuneration Report, the board also announced some changes to the metrics for the short-term incentive for the 2024 financial year. The board determined this reprioritization of the CEO's scorecard will appropriately shift focus to the group's refreshed purpose to help all Australians eat and live better every day. I'd also like to take this opportunity to speak to resolutions four and five, relating to the allocation of equity to our Managing Director and Chief Executive Officer, Leah Weckert. Resolution four relates the approval sought to allocate 26,054 shares to Ms. Weckert, pursuant to the 50% deferral into equity of the short-term incentive earned in the 2023 financial year. These shares will be subject to a two-year deferral.
Resolution five relates the approval sought to allot Ms. Weckert 192,520 performance rights, being equivalent to 175% of Ms. Weckert's total fixed compensation. The terms of this long-term incentive grant are set out in the notice of meeting, and importantly, they are entirely performance-based. 50% of the performance rights are subject to our Relative Total Shareholder Return, measured over a three-year period, and 50% are dependent on the company meeting a cumulative Return on Capital measurement, as set by the board, in line with the execution of our strategy. This long-term incentive structure has been set by the board in recognition of the importance of aligning remuneration outcomes with long-term shareholder returns, in accordance with our vision of becoming the most trusted retailer in Australia and growing long-term shareholder value. Thank you. I'll now hand back to the chairman.
Thank you very much, Richard. As chairman of the People and Culture Committee, Richard does an extraordinary job covering an amazingly wide range of issues. You can imagine, with a team membership of 120,000, there are always issues on the agenda. It's also very important that we get the alignment that Richard refers to between what we're setting internally and what the market and our shareholders require in terms of making sure that these items come together the right way. I just thank Richard for his leadership in that area. Turning to item three, then, of today's agenda, the text of the resolution is now displayed. While the vote on this item of business is advisory only, the board does take account of discussion and voting when reviewing our remuneration practices and policies.
The board recommends that shareholders vote in favor of the adoption of the remuneration report. I now invite any questions that you may have of the remuneration report, starting with any questions from the floor. If there are no questions from the floor, are there any questions online, Sally?
Chairman, there are no online questions or comments on this item.
I'll just double-check that there are no questions from the floor. Thank you. I think, therefore, we can move forward with this item. The details of the proxies and direct votes received in relation to this item will now be displayed. Please now enter your votes for item three, if you have not already done so. I now turn to item four, which is the approval of the grant of short-term incentive shares, to which Richard referred a moment ago, to our Managing Director and Chief Executive Officer, Leah Weckert, as part of her short-term incentive award for the 2023 financial year. The text of the resolution is now displayed. Details of the proposed grant are set out in the notice of meeting.
As outlined in the notice, the purpose of Leah's short-term incentive is to provide increased focus on, and reward for, performance against those areas that most significantly drive the delivery of the company's strategic initiatives, to which Mr. Freudenstein has already spoken. The board, with Leah abstaining, considers the grant of STI shares to be appropriate in the interests of shareholders and unanimously recommends that shareholders vote in favor of resolution four. I now invite any questions that any shareholder may have on the floor in relation to Leah's short-term incentive grant. If there are no questions from the floor, Sally, are there any questions online?
Chairman, there are no online questions or comments on this item.
I'll just double-check that there are no comments from the floor. Thank you. Then, I think we're able to move forward. The details of the proxies and direct votes received in relation to this item will now be displayed. Please now enter your votes on item four, if you have not already done so. I now turn to item five, which is the approval of the grant of performance rights to Leah Weckert as her long-term incentive award for the 2024 financial year. The text of the resolution is now displayed. Details of the proposed grant are set out in the notice of meeting. As outlined in the notice, the purpose of Leah's long-term incentive is to ensure that her interests are aligned with the long-term interests of shareholders. Probably by providing her the opportunity to be awarded an equity interest in Coles...
subject to the achievement of the performance targets, as set out in the notice of meeting, to which Mr. Freudenstein has already spoken. The board, with Leah abstaining, considers the grant of performance rights to be appropriate in the interest of shareholders, and unanimously recommends that shareholders vote in favor of item five. I now invite any questions that you may have on the approval of Leah's long-term incentive grant. Are there any questions from the floor? Microphone one.
Mr. Chairman, I would like to reintroduce Mr. Mike Robey.
Thank you, Mr. Chairman. We do have a few concerns with the long-term incentive component, the quantum of the long-term incentive. Look, for those who haven't done the sums, at the time of the package being declared, it was roughly at the maximum you could achieve for the one year is AUD 8 million. We figure that it's important that you have pretty tough hurdles rather than make it a gimme. There are a few aspects about the Coles operation, which are perhaps a little bit different from some companies. It's pretty much a duopoly in Australia, the retail business of consumer staples. But it has its challenges, and we certainly don't suggest that Coles is not meeting those challenges and doing all the right stuff.
However, we look, we look for tough hurdles. And look, one thing that's missing, we were taken by Mr. Freudenstein through the two components of the LTI. One was a relative shareholder return. In other words, how does Coles do relative to some peers that are chosen? And the other one was return on capital. The issue is, for shareholders, that in the event that the RTSR, as it's called, passes the hurdle, there's no requirement to make the absolute shareholder return positive. So in other words, shareholders could miss out because the share price is actually lower at the end of the year, plus the dividends, but in fact, the award is granted. So in looking at what your signal might be, a hurdle, which is absolute shareholder return. Thank you.
Thanks very much, Mr. Robey, for your comments. Firstly, I'd say that when these arrangements are set, Richard foreshadowed, but we have to be conscious of market performance, market competitive performance. We have to be very conscious of, are these aligned to create long-term value for shareholders? And are they going to be appropriate for the nature of our business? You suggest that we need to be sure that the hurdles are appropriate. And we would entirely agree with that. 50% of the performance has to be by out-achieving the market as a whole. We measure the market there as the ASX 100 listed companies. That is the biggest 100 companies listed on the Australian Stock Exchange.
We have—in order to get any vesting relative to how all of those companies have performed, we have to be in the top half to have any vesting. Otherwise, there's no vesting. And then you progressively can move, provided you're in up to the top quarter in performance, you can progressively move up to a 100% entitlement for that component part of the long-term incentive.
The fact that it is this relative outperformance is all aimed at saying, "Well, what do shareholders want?" They want to know that when they put their money in Coles, it's not only being administered properly for a good purpose, responsibly, having regard to the wide nature of the Coles business, but they want to make sure that Coles returns to the shareholders, returns which are favorable in compared with other opportunities that shareholders may have had to invest their money in the, in the Australian Stock, Stock Exchange. That is the what, reason why we look at the Relative Total Shareholder Return. I note your comment about absolute performance, Mr. Robey. I think, I just come at it from a slightly different perspective in that regard, but it certainly I, I note the comments you've made.
The other component is the return on capital, which, as Richard Freudenstein mentioned in his address, is set having regard to what is actually going to drive the long-term success of the Coles business. So we have long-term capital plans, long-term sales, income, return plans that we assess in a fairly extensive, and I would say, demanding way, to make sure that the hurdles are not... I think you used the word gimmes. And, we certainly aim to see what the challenges are, what makes sure that the strategy aligns with long-term shareholder creation, and set the hurdles appropriately. In terms of the structure of this market, this market is unbelievably competitive, Mr. Robey. Every day, there is a customer who's marking our card in how we are operating as Coles Group Limited.
They're going into our stores, they're seeing what is the standard good enough? Is the range good enough? Is the quality good enough? Is the price good enough? Is the service friendly enough? And if it's not, there are many other choices. We are acutely aware of that, and our aim is to outperform in the marketplace in which we operate. And let me assure all shareholders, this is a very competitive Australian market for supermarkets and liquor. I don't think there's much more I can add to your question, but I hope those comments are useful, Mr. Robey. Any other questions or comments? If not from the floor, is there any comment online?
Chairman, we've received an online question from Mr. Steven Maine, who asks: Since last year's AGM and LTI vote, we farewelled CEO Steve Cain, and appointed Leah Weckert as CEO. Could Leah comment on how often she has been in touch with Steve Cain during her first six months in the role? Also, could Leah summarize her past LTI grants since the Wesfarmers demerger, as to whether they have vested or lapsed, and her personal history of buying or selling Coles shares? Please don't say, "Look it up in the annual report and through ASX announcements." It's complicated, and the CEO could factually summarize the situation in 60 seconds.
Mr. Maine, I think the ambit of your question is a little wide. In terms of the transition, which was the commencement of your question, the transition from Steven to Leah has been just something which has, I think, been so smooth, so positive engagement of Steven assisting in every way he could prior to his cessation of the role of Managing Director and Chief Executive. I think we made the announcement to the market sometime towards the latter part of February. The next 2.5 or 2.25 months were very much the transition time, where Steven was doing everything he could to facilitate the development of Leah's transition so that it could be seamless, and it has been seamless.
I was personally delighted that the opening of the Redbank facility, to which we referred earlier, was actually able to happen prior to Steven's departure. Because he had spent an enormous amount of energy and effort to try and make sure that facility was delivered, and it was a delight for everyone to be at the opening of that towards the latter part of April. The art of being a good CEO who transitions to retirement is, I think, to do everything you can to facilitate the transaction, and then to let the new CEO move forward in a smooth way with the new agenda, with the team.
I think we have really enjoyed a wonderful transition of opportunity from Steven to Leah, and hence underpinning some of the comments I made earlier about our positive view about the outlook. In terms of Leah's LTIs, you're quite right. The whole structure of remuneration in Australia is complex, because you've got the total fixed salary component, you've got short-term incentives, you've got long-term incentives. These are made payable over periods of time. We just passed a resolution to pay part of the incentives for Leah's short-term incentives over a two-year period, because there's a two-year lockup on the 75% component, which is in shares. So how they sort of roll through is quite complex, but we do go at length to explain that in each and every one of our remuneration reports.
Full details of that are provided, and you can see exactly what Leah's shareholding is in Coles Group Limited. I think we have a very highly engaged senior team, because the program of incentive and reward and alignment with shareholders works so very well. Are there any further questions, Sally?
Chairman, there are no more online questions or comments on this item.
I'll just check, are there any further questions from the room? Thank you. If there are not, then I think, the details of the proxies and direct votes received in relation to this item will now be displayed. Please enter your votes on item five, if you have not already done so. Before I close the meeting, I just would like to pause to just make sure that, were there any other issues or questions that shareholders wanted to raise, either from the room or online? Sally, if there are, if there are no further questions online, there are no further questions in the room. I just would like to say what a pleasure it's been to have everyone here today. This now concludes the formal business of the meeting.
If you've not already done so, please ensure that you submit your vote for each resolution in person or through the online platform. I will now declare the poll closed. The final results of the poll will be advised later today to the Australian Securities Exchange, and will be published on our website as soon as possible. That concludes the business of our meeting today. Thank you very much for your attendance and for your support of Coles. We very much look forward to your continuing support as we enter the very happy and business Christmas trading period. I now declare the meeting closed.
For those who are joining us in Melbourne, please participate with the executive leadership team and the board outside the meeting room, where light refreshments will be served, and an opportunity for further informal discussion. Thank you very much, everyone, for your attendance. Pleased to have you.