Thank you for standing by, and welcome to the Coles Group Third Quarter 2025 Sales Results Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Leah Weckert, Chief Executive Officer. Please go ahead.
Thank you, and good morning, everyone. Welcome to Coles' Third Quarter Sales Results for the 2025 financial year. Before I begin, I would like to acknowledge the traditional custodians of this land on which we meet today, the Wurundjeri peoples of the Kulin Nation. We acknowledge their strength and resilience, and pay our respects to their elders past and present. I'm joined today by Charlie Elias, our CFO, Matt Swindells, our Chief Operations and Supply Chain Officer, Anna Croft, our Chief Commercial and Sustainability Officer, and Michael Courtney, our Chief Executive of Liquor. I'm pleased to report solid growth in the third quarter, with group sales revenue growth of 3.4% to AUD 10.4 billion. Supermarket sales increased by 3.7%, underpinned by solid volume growth, and liquor sales increased by 3.4%.
From a supermarket perspective, we are particularly pleased with this result, given we were cycling over a very strong third quarter of FY 2024. Our two-year growth rate is 8.9%. Whilst interest rates started to ease this quarter, it's clear that customers remain value-conscious. We saw a positive response to our summer value campaign, coupled with continued growth in our Exclusive to Coles portfolio, with sales up 4.5% overall and up 13.7% in our Finest tier . Inflation metrics also remained broadly stable, with supermarkets' inflation, excluding tobacco, of 1.1%, compared to 1% in the second quarter. Inflation in meat and fresh produce were elevated but offset by a slight deflation in packaged goods. Higher coffee and cocoa commodity prices are still a watch-out and are continuing to impact a range of products such as confectionery, boxed chocolate, and coffee.
In liquor, we reset our value offer across all stores to deliver a more compelling offer for customers. This included the nationwide rollout of the Price Match Promise. We also saw a solid sales uplift from the new Tasmanian stores that we acquired at the end of last financial year. ECommerce sales continue to grow strongly across the portfolio, with 25.7% growth in supermarkets and 18.2% growth in liquor. We're also really pleased with the performance of our CFCs. By the end of the third quarter, we had fulfilled 1.5 million orders, with perfect order rates continuing to track at more than double the national home delivery rate. Now, for those of you on the call who are based in Queensland, you would appreciate that this period has not been without some challenges in terms of weather events.
In February, Far North Queensland experienced severe flooding, and in March, Cyclone Alfred impacted South East Queensland and Northern New South Wales. As is the Coles way, our team members came together to help ensure that their local communities had access to essential food and grocery supplies throughout these events, as well as dedicating significant time and resources to assist with recovery efforts. These events, however, did have a minimal net negative impact on supermarkets' earnings, with the positive sales impact from pantry stocking and restocking being more than offset by store closures and damages, additional supply chain costs, stock write-offs, and natural disaster leave provided to team members. The other thing I would like to highlight is that in March, we announced that we will be proceeding with the national rollout of our Simply Liquorland program, converting Vintage Cellars and First Choice Liquor Market stores to the Liquorland brand.
We are really excited for this rollout, as it will simplify the customer offer, align our product range, commissions, and our Flybuys loyalty program, and omnichannel services across the portfolio. This decision follows the success of our pilot program, where we saw increased brand awareness and customer engagement, repeat visits, and greater shopping satisfaction across our trial stores. The bulk of the rollout is expected to be completed by the end of December 2025, and approximately AUD 7 million in transformation costs are expected to be incurred in the second half of FY 2025. Before handing over to the operator for Q&A, some quick comments on recent trading.
In the early part of the fourth quarter, supermarket sales growth has remained broadly in line with the third quarter, with continued volume growth supported by a positive response from customers across our Easter offer, including our award-winning hot cross buns and our Own Brand range. In Liquor, we have continued to see positive sales growth, underpinned by the success of our recent value campaigns and the addition of the new space over the last 12 months, including the Tasmanian acquisition. Thank you, and I'll now hand over to the operator for Q&A.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. In the interest of time, we ask that you please limit to one question per person. If you would like to ask a further question, you may press star one again to rejoin the queue. Your first question comes from Shaun Cousins with UBS. Please go ahead.
Thanks, Sarah. Good morning, Leah and team. Maybe just a question regarding the impact of WITRON and execution. I'm just curious the degree to which WITRON is assisting supermarkets, particularly around be it in-stock availability. We could actually sort of see some of the strong sales cycling sort of tough numbers is a function of WITRON sort of helping the business out, please?
Hi, Shaun. Thanks for the question. We do continue to be really pleased with the ramp-up that we've seen both in Red bank, which is now fully operating at business case, and Kemps Creek as well. In Kemps Creek, we're definitely seeing the same set of outcomes that we saw in the rollout from Red bank. I might get Matt to maybe go into a bit of the detail around that.
Yeah, good morning, Shaun. I would think of this in two areas, really. The first is the structural benefits we get from WITRON. Specifically, we have the whole of the grocery range in the state, which means we've got 20% more frequency of deliveries into stores, specifically on the slower ranges that can be more susceptible to out-of-stocks. It also helps us then build better, easier, store-friendly pallets for the team. We have a structural advantage that definitely the store feedback and what we see in the metrics of maintaining inventory, it makes it easier to work the store and it gives better availability. I think secondly, as we've got now a fewer bigger bolder promotional plan, our ability to execute that consistently with a heavier stock weight, WITRON gives us that ability to flow that product better to the stores.
We have structural benefits that help the team, and we have the ability to control the flow that helps the size of the offer and the execution of the plan. I'd add, though, that we've been really focused on the ramp-up, so this is early days of our optimisation, and making WITRON really work end-to-end for our business across transport, the DC, and the store. We are at the start of that journey, and we see more upside in future. So far, it is very pleasing, and it is definitely helping our execution.
Great. Fantastic. Thanks, Matt. Thanks, Leah.
Your next question comes from David Errington with Bank of America. Please go ahead.
Morning, Leah. Look, Leah, this question's coming from a glass-half-full approach because I think your execution at the moment is probably as good as I've ever seen Coles right at this point. But from home brand, now, the home brand to me looks like I'm not going to call it soft. I'm going to say area that you could drive more opportunity. And just to call the numbers out, like home brand, 4.5% growth in the quarter, but your food sales were up 4.7% ex-tobacco. And when you look at Coles Finest, up a remarkable 13.7%, that's at that upper end of customers. So it looks to me that the lower-end price or the entry point home brand is underachieving. Is that the right observation to think? Because now that to me sees an opportunity for you that there could be an area. But what's going on there?
Because I would have thought in this area of shoppers wanting to get more entry-level prices, is it non-food that's hurting you, or what is it? I just think that I'm surprised that home brand's not doing a little better. I know it's cycling a big comp. I get that. I would have thought that that home brand in that quarter would be a little bit of an area that you'd be thinking, "I could be doing a bit better." Love to hear your comments on that.
Thanks for the question, David. I think we would agree with you that we continue to see this as a real opportunity for us going forward. I think we are pleased with the number, though. I mean, as you pointed out, it is cycling a very strong comp from last year. On a two-year growth basis, it is growing at 15.9%, which is a really strong growth rate and significantly ahead of the two-year growth rate for the rest of the business. I think what we have got happening in terms of the dynamics at the moment is we are seeing customers trade into more affordable options. Own B rand is very positive. We have also got our proprietary brands, which are investing more into promotional activity at the moment, and that is very attractive for customers.
We have also got the out-of-home effect happening, which is customers are shopping or they are going out for meals less, eating at restaurants less, and cooking more at home. When they are cooking at home, they are trying to recreate some of the experiences that they have when they go out, which is one of the reasons that they tell us that they like to trade into the Coles Finest area and why we are seeing some of the strong growth there. We are continuing to invest in the entry tier. You would have seen in the release that during the quarter, we did add 50 more lines into the Coles Simply portfolio. Coles Simply, you would probably have to remind ourselves, is only about 18 months old. We are growing that. We are growing it in terms of brand recognition with customers.
We're growing in terms of the understanding of what it is as a range. We definitely see that there's strong potential for that going forward as we continue to put more and more of the right products in there and get the price and range hierarchy right. I think one of the interesting things as well is some of the places that we are seeing real strength in Own Brand. One of them is freezer. Freezer is substantially ahead of the overall portfolio in terms of growth for Own Brand .
We have put a lot of new innovation into that category, and I think it also speaks to the fact that customers are looking for convenience as well, which is where we are also seeing strong Own Brand growth, which is then in that convenience category, so the ready meals and the family meals that we have in that space. I completely agree with your assessment, David, that there is more opportunity in there. We actually think on a two-year basis, we are doing pretty well.
Okay. Okay. Thanks, Leah. Appreciate the answer.
Your next question comes from Phil Kimber with E&P Capital. Please go ahead.
Hi guys. Thanks for taking the question. Sorry, I missed the start, so hopefully I'm not repeating a question that's already been asked. You mentioned in there deflation in the health and home category sounds like it was greater in this quarter. Is that sort of is there some sort of material price actions you're taking there? I know it's an area that you've called out in the past as one where market share might have moved to other players that naturally, with the right offer and price, should move back to the supermarkets. If you could explain a bit more about that, that'd be awesome. Thanks.
Thanks for the question, Phil. We have seen that non-food space in deflation now for the last couple of quarters. It is sort of not new news. What I might get is Anna to talk about some of the dynamics.
Yeah, of course. Look, I think there's no doubt we are seeing this as a highly competitive market, and we're seeing more competition from non-food retailers than before, such as Amazon, Bunnings, and pharmacies. We are very aware of that. We are aware that obviously supermarkets are at a total level of loss share, but we see that as a real opportunity. We are continuing to review our price, our ranging, our pricing architecture to a much broader range of competitors than we ever have done. We are responding accordingly to make sure that we are delivering to customers. We are also really aware that value goes beyond price. Actually, we are really working hard on how we can offer a broader range to customers, how we can use our eCommerce, our CFCs, as well as the benefits of our Flybuys loyalty program.
Actually, we're starting to see benefits come through. You may be aware, we've actually made some leadership changes very recently in our non-food business and have appointed Leanne White, who was previously our GM of grocery, into that space. As we build the new plan for the future, I'm very excited to see what she will deliver in that space. It is very competitive. We are reacting accordingly, and we are energized by the opportunity it gives us for the future.
Thank you. It sounds like there's some more changes coming as well with that management change that we should, over time, start to see.
Yeah, definitely in the non-food space, we're going to continue to make sure that we've got the right price and range hierarchy to be able to compete.
That's great. Thank you. Is it two questions, sorry, or one? What was the question?
It's just one, Phil. We might send you back to the end of the queue. If we have time at the end, we'll come back. Thank you.
No worries. Thanks.
Your next question comes from Tom Kierath with Barrenjoey. Please go ahead.
Morning, guys. Just a couple of questions.
Tom, we've lost you. Can you still hear me? Tom, we're just going to bump you down one, and we'll come back.
Your next question comes from Adrian Lemme with Citi. Please go ahead.
Thank you. Back a bit off Phil's question there about non-food and just your earlier discussion on ranging. I just want to explore the potential for expansion of the private label range in those non-food categories. From what we can see, the private label penetration is very low in pets and somewhat in personal care, but a bit better in cleaning. Can you talk to the opportunities there? That would appear to be a way that you can maybe combat that share loss with offering some sharp pricing.
Yeah, happy to, Adrian. Look, I think, as you would expect, we are looking where do we think we have the right opportunity to play from an Own Brand perspective and how we deliver true differentiation for customers. We do see across all of that non-food area an opportunity for Own Brand. We are working through that in, as you imagine, minutiae, to make sure that we can pull that up. Actually, I think it does give us an opportunity as long as we are focused on what is right for customers. As we said, we're working through that plan, and you should start to see things flow into store in the preceding periods as we make changes of our offer there across not only our Own Brand, but across the branded portfolio and our range and pricing hierarchy as well.
I think the other place, just adding to that, Adrian, that we're looking at where are there opportunities in the non-food space is through the CFC. As we look to expand the range in those, and you would have seen during the quarter, we did continue to get more new lines into the CFC. We're up to about 27,000 SKUs now in there. Predominantly, the ones we added in, though, this quarter were around food, so things like global and international foods. We do think there's a lot of potential there in the non-food space as well because in non-food, you typically have more of a tail, which is much more effective for us to accommodate in the CFCs than it is in stores.
That makes sense. Thank you.
Your next question is from Bryan Raymond with JPMorgan . Please go ahead.
Morning. My question's around execution and on-shelf availability and the improvement you guys have seen year on year and how it's contributing to sales. I think there's two key factors that my supply feedback indicators: store-specific ranging and then the ADCs. I just want to get a feel for how far through that SSR program you are and also the degree to which the ADCs are helping. Just the following from that is around the wage cost environment, whether you need to add labour into the stores at all to really drive on-shelf availability up towards more worst levels. Thanks.
Yeah, thanks for the question, Bryan. I think the store-specific ranging program, and actually, we've got a bit of a macro space program we're also implementing alongside that, that is definitely helping us to get the right spacings and the right allocations in terms of space by category, which is helping with availability. Obviously, the ADCs are significantly improving the Queensland and New South Wales position. I think the other thing I'd probably put into the mix is we have made some organisational changes as well. We have created a Centre of Excellence for Replenishment, which now looks after our demand and supply planning. That was done towards the back end of last calendar year. I think we would say that it's really come into its own as we've gone through this heavy event period in the early part of this year.
It is really helping us to keep on top of availability and really get to problems quickly, lean in, and get them solved. I think that is the third one in the mix. Anna, did you want to talk to SSR and where we are on the journey on that?
Yeah, we're still very early days. I think if we take range more broadly, we're absolutely focused on making sure we've got the right customer offer in every category. There's a lot of work going on there to bring the right innovation and remove duplication, but also tailoring. We did six additional ranges in the quarter, so we still have got a long way to go to get to all the range that we want on there. We're continuing to optimize that. The results are very encouraging, but we still think there is more in there as we learn and we play with the big data model that's driving that. Great progress. The MSO program for the macro space program is now starting to gather some momentum as well.
We will look to see how that plays out over the rest of the year and what we have to plan for next year as well. We are pleased. There is a lot more to do. I think we are taking it more holistically from a total customer offer. One element is obviously the SSR.
Excellent.
Your next question comes from Tom Kierath with Barrenjoey. Please go ahead.
Morning. Sorry, have you got me there, Leah?
Yes, we can hear you loud and clear.
All right. Sorry about that. Yeah, I just had one on Ocado. I thought there might have been a bigger bump in online sales in the quarter, given this is the first quarter that you've had it in. I'd just be interested in what you're seeing around new customer, I guess, recruitment, basket sizes, and the extended range performance that I think you've rolled out through Ocado. Thanks.
Yeah, great question. I mean, I think from a growth perspective, in H1, we were at 22.6% growth for online. In quarter three, we've stepped that up to 25.6%. We have seen a step on, and we are definitely getting the highest growth rates out of Victoria and New South Wales, which is really fueled by the CFCs, which are performing a lot stronger in terms of home delivery growth than the other states. Matt, did you want to give a bit of a detail around kind of the different attributes that Tom just went through?
Yeah. Look, I think for the overall growth, there's probably three areas that are around, including that CFC that we saw driving growth in the quarter. We did also deliver more enhancements to the customer experience. We deployed what we call Due to Buy, which provides personalized one-to-one recommendations and essentially helps customers if there are items they may have forgotten to add them back into the basket. That front-end experience is still driving growth. We've also had a better trade plan, and that included our very first app mega sale where we had products, we had transactions, and we had subscriptions all bundled as part of an offer. We actually now have over 50% of all of our transactions going through the app. The final pie is capacity. Yes, some of that comes through the CFCs.
They are growing faster than the rest of the nation in next-day delivery. We have got twice the perfect order rate of the rest of the nation. As Leah mentioned, on the 27,000 SKUs, if you were previously shopping our Richmond Dark Store in VIC and you are now shopping the CFC in Victoria, you have got double the range. That is double the range, double the perfect order rate with the improvements in freshness. Interestingly enough, we are seeing new customers to Coles, and we are also seeing a higher retention of those customers. Once they shop the CFC, they are stickier than others. All of those metrics are headed in the right direction. I would point out we really did the transition and the ramp up just before Christmas and trading Christmas. There is a lot more still to do.
The final part I'd add is we also expanded our immediacy offer. Rapid is now available at 80% of the population. That plays back to our strategy where we think about the omnichannel customer and the omnichannel operation to support it. The CFCs are growing in line with what we expect, and we're very pleased with it. There are other levers that we're pulling too as part of an overall plan.
Great. That's good colour. Thanks, guys.
Your next question comes from Michael Simotas with Jefferies. Please go ahead.
Good morning. I'm just being interested in some comments on where you see your market share trend through the quarter. We've spoken a little bit about health and home, but also in some of the fresh categories, given it looks like specialists have continued to perform very well over the last couple of quarters.
Yeah, it's a good question. I mean, I think, as you know, it's sort of notoriously hard to get full reads on market share, and we'll probably need a couple more data points to come out before we can have a really firm view on it. I think our sort of overall view would be that we've at least held our own in terms of market share for the quarter and maybe stepped it on a little bit from where we were in Q2.
Okay. Thank you.
Your next question comes from Lisa Deng with Goldman Sachs. Please go ahead.
Hi. I had a question on, I guess, the early trading into fourth quarter. I appreciate it's early, but I would have thought that third quarter last year was a very strong quarter, and the fourth quarter was easier comps. With both CFCs, both ADCs, and then the Easter shifting into fourth quarter, we would actually be looking at accelerated growth into the fourth quarter. How should we think about the shape of that maybe through the quarter or the phasing in the prior year that we should consider? Thanks.
I mean, Lisa, we're sort of four weeks into what is a very noisy quarter because of the Easter dynamics in there. I don't think we'll be giving any more colour than what we've already put into the outlook. I think we're pleased with the momentum that seems to be continuing in terms of underlying trade into the fourth quarter once we control for the Easter effects.
Okay. Thanks.
Your next question comes from Ben Gilbert with Jarden. Please go ahead.
Good morning . Maybe just from Anna, just interested around EDLP in non-food and specifically how you're thinking about that. Because you look at your promo share on some of those categories in dishwashing or pet, etc. Now, there's an argument that you could match some of your newer competitors on an EDLP price, and your ASP might actually be higher. I'm just interested in sort of where your thinking is around that opportunity and also if the court case that's coming up around pricing is a bit of an impediment to actioning anything before that if you were to do a bigger push.
Yeah. Thank you, Ben. I think as we think about non-food, we're taking a total holistic view to how we're thinking about the strategy and execution. EDLP will form part of that. We will meet the customer where they are and the best way to compete against the major competitors. There is no doubt that has been our highly intensive promotional area for some time. We're just looking at what's the best way to navigate that means we can deliver an exceptional customer offer every time to the customer that they need it, whether that's online or in our stores. We'll be working through that. You are right. There is a different makeup of the competitor set versus some of the other categories, and we're very conscious of that.
Your next question comes from Caleb Wheatley with Macquarie. Please go ahead.
Morning, Leah and team. My question just on the supply chain and dual running costs. You previously called out these would be wound down by the end of this financial year. You have mentioned the closure of the manual DCs in New South Wales. Does that account for the majority of those dual running costs? Is it hard to be de-risked now, or how should we be thinking about those costs as we go into the fourth quarter, please?
Yeah. Caleb, absolutely. As we put out previously, all those sort of one-off implementation and dual running costs, they will be out in the FY 2026 numbers. They are absolutely out in FY 2025. The dual running costs were set between six. In terms of, you're right, the closure of the DCs occurred in January. Those costs are pretty much behind us.
Great. Thank you.
Your next question comes from Craig Woolford with MST Marquee. Please go ahead.
Good morning, Leah and team. Can I just ask a question about promotional investment? There are two parts to it. One on the fresh side, there were a few key products, red meat, some key fresh produce lines that have seen significant increases in wholesale prices. While there is higher fresh inflation in your numbers, it does not look too material. Has there been some sort of absorption of those wholesale spikes in some of the fresh produce categories? On the rest of the basket, are you seeing an increase in the proportion sold on promotion at the moment? Some of the retailers are saying baseline sales are down and promotional sales are up.
I think you mentioned the increases in terms of commodity prices for both meat and fresh produce. I think on meat, we tend to have a bit of a delayed effect that occurs in our business because we have large parts of those categories which are actually on sort of longer-term contracts, things like chicken and pork and the like. Even in some of the categories where they're on shorter periods in terms of price negotiations like beef, for example, it's still in terms of months that we tend to negotiate prices ahead of actually getting the product. There does tend to be a bit of a delay in the meat space. In the fresh produce space, obviously, we've had a bit of disruption in the period because of the weather events. Anna, did you want to talk to maybe a little bit of the detail around that?
Yeah, of course. Again, Craig. As you say, we did see inflation step up in produce in the quarter, and that was predominantly due to Cyclone Alfred. I think it's fair to say we were pretty lucky on some key categories in terms of what we had in transit and in ripening centers and enabled us to manage through it. As always with some of these things, there is a bit of a lag that comes through in terms of those inflation numbers. We're certainly seeing some planting gaps coming through now, particularly in things like beans and corn. We are watching very closely what happens with that and working how we manage that through. If I pick up the broader basket in terms of your question on promotional participation, actually promo participation in the quarter was slightly down, both on last year and the first half.
That really is a bit of a reflection of the seasonal timing, but also some of the availability impacts due to Cyclone Alfred. What I would say is actually the customer behaviour continues to be consistent with what we've been sharing with you for a couple of months now around kind of customer-seeking value. We've been working really hard on promotional effectiveness, how we manage that through seasonal value, EDLP, and simplification. We are continuing to work on promo optimisation and putting offers that really matter the most to customers in the right place. We seem to be resonating really well. Actually down in the quarter, but in line with the strategic plan we had.
Great. Thank you.
Your next question comes from Richard Barwick with CLSA. Please go ahead.
Good day. I just want to talk about liquor. At least relative to our expectations, the number came in a little bit softer. I noticed that you talk about the markets impacted by subdued spending. Do you have a sense there how you're performing relative to the market or wider competitor set?
Thanks for the question, Richard. I'll ask Michael to cover this one for us.
Thanks for the question, Richard. W e were actually really pleased with the number given from both a headline perspective and adjusted comp, we're showing an improvement in trend quarter on quarter, which I think is really positive for us. From what we can observe in the market data, our level of outperformance to the market increased throughout the third quarter, which shows that the market has remained subdued for the third quarter. We are really pleased with the direction that we're headed in at the moment. There are a lot of changes that we're making to the offer to have a more simple and relevant offer for customers. I think they're responding to it.
Okay. All right. Thanks for that.
Your next question comes from Shaun Cousins with UBS. Please go ahead.
Great. Thanks. Just a second question for Michael. Just the AUD 7 million rebrand cost in the second half to go to Liquorland, and that'll continue into the first half. Should we just assume the first half 2026 will be another AUD 7 million, or will you accelerate that? Just keen to get a bit more clarity on what that impact will be for the six months into December 2025, please.
We can provide some more specifics around the actual quantum of it, probably at the full year results, Shaun, but I would think about FY 2026 as being larger than the second half of FY 2025, and the vast majority of those costs in FY 2026 will occur in the first half.
Great. Thanks.
Your next question comes from Bryan Raymond with JPMorgan . Please go ahead.
Thank you. Just back on the CFCs, what proportion of sales that you're generating through there? While I acknowledge it's early days, just on the extended range, just interested as to what percentage of sales is coming from that extended range. Is it meaningful yet? I noticed you've got a big SKU count. Are any of those meaningful contributors? It's possible to quantify that. That'd be helpful. Thanks.
Yeah. I mean, the first thing to remember is that what we've done is put the whole of the store network range in for the state. It is questionable whether you would describe some of those as extended range because you will find them in some of our stores across Victoria or across New South Wales. Most stores would only have, on average, around 20,000 SKU-22,000 SKUs, whereas CFC, when we started early days, had around 24,000 SKUs. The ones that we've added in today, I would say they're a very small part of the sales quantums at the moment. They tend to be sort of more niche products. We are still going through the learning process around how do we fully expose them to customers and make sure that they can actually find them on the site.
I think there's more to be done on that. We're sort of taking some learnings from others around how we can do that a bit more effectively. At this stage, Bryan, early days and pretty small.
Okay. Thanks.
Your next question comes from Michael Simotas with Jefferies. Please go ahead.
Thanks very much for taking another one. I don't want to get too much into the minutia, but you had quite a big sales acceleration in the latter part of the third quarter based on the update that you gave us for the early part. It seems to have moderated back to the average of the quarter again. Was that uplift sort of anything specific, or is it more related to the weather events that you had that you called out earlier?
Yeah. That's a great question. Let's cover off the weather events first. When you have one of those weather events, you've really got two effects that are impacting sales. You have the panic buying and the stock up that occurs pre the event. What tends to offset that is store closures that we may have to do during the weather event or because of damage and flooding post the event. When we net those two impacts out across the three major weather events that we saw during the quarter, there was a very slight positive incremental sales. It's pretty immaterial in the whole scheme of things. It's actually more the underlying sales that we saw strengthen in the last four weeks of the quarter.
I think we do just put that down to we were very, very focused on execution in the lead-up to the big seasonal events around Easter. Availability was a huge priority. We had been very, very focused on what was the right value plan to load in to drive volume. That all just came together really well.
That's really helpful. Thank you.
Your next question comes from Ben Gilbert with Jarden. Please go ahead.
Good morning. Thanks for taking up the question. Just a quick one. Just interesting conceptually, I think in the last few years, a bit's been talked about around sort of potential terms, differentials, and opportunity for Coles. Obviously, you're having some great momentum and execution. It looks sort of like it's best in class. I appreciate it's probably been some more discussions more recently with suppliers around what opportunities there are. Hypothetically, if you were to be able to sort of start gaining some more terms, how do you think about balancing that between putting it back into price to continue to drive sort of price leadership in the market versus banking it?
I think as we've said previously, value at the moment we know is absolutely top of mind for the customer. We are also very aware that we're operating in a market at the moment which is more competitive than we've seen, I'd like to say probably ever, with the competition that we've got from the specialists, which I think got mentioned before in one of the questions around the strengths that they've had in terms of the fresh food space. There's more competition in the non-food space. What we are really committed to as a business is making sure that we maintain our relevance to the customer and that we are competitive on the offer week in, week out. We are doing what we need to do to make sure that that is the case.
Supply engagement to Coles, how are you seeing that versus where it's been historically? Are you seeing good engagement, good opportunities to sort of drive some of these outcomes?
I might ask Anna to maybe comment on that.
Yeah. Look, we're working really closely with suppliers. Obviously, without suppliers, we don't have a business. We recognise that longer-term partnerships and really deeply collaborating from end-to-end points of our business in a real 360 way is incredibly important. We're yet to see the Advantage Survey, but we are certainly spending an awful lot of time in the restructure we did at the back end of the last calendar year to refocus the commercial team on kind of master merchants and putting in the incremental category managers was deliberately to step change our partnership with suppliers. I will tell you after the Advantage Survey, but we're certainly working very hard on long-term partnerships to drive differentiation and make sure we deliver both for our partners and for our customers and obviously our business as well.
Fantastic. Thank you.
Your next question comes from Lisa Deng with Goldman Sachs. Please go ahead.
Hi. I had a question on potential impact from the U.S. tariffs. I know that we probably do not have material direct impact, but from a second derivative impact, whether it be input costs to some of our suppliers, potential freight costs that might be offset in our supplier costs, are we having any conversations to see that potential cost inflation starting to come through for the non-fresh category?
It's a great question, Lisa, and it's a bit top of mind for us at the moment. You are 100% correct that the direct impacts for us are minimal and immaterial. That's not a concern at all. It's those secondary effects and indirect effects that we're just monitoring and keeping an eye on. I think it's probably too early to say the extent of where that is going to play out. I think our assumption would be is that there could be some cost of goods impacts across various categories. One that we're keeping a very close eye on at the moment is beef, particularly around sort of the demand that may come through the system for beef processing capacity here in Australia as a result of particularly some countries pulling back from buying US beef.
Got it. Okay. Thank you.
Once again, if you wish to ask a question, please press star one. Your next question comes from David Errington with Bank of America. Please go ahead.
Thanks, Leah. Leah, question to Michael Courtney. I'm trying to get my head around how much the Simply Liquorland program is going to improve the overall liquor business. And Michael, if you can bring to life some of the findings that you had from your pilot, I mean, I'm sort of like a bit at the moment ambivalent as to why just changing the brand of Vintage Cellars and First Choice to Liquorland, how that's going to help. I know there's costs upfront, which you discussed with Shaun, but I'd like to delve into a little bit of the benefits that you're seeing. What benefits do you think that you're going to be able to give customers that could step change liquor as a business?
If you could go through some of your findings from your pilot and bring to life some of the advantages that we can get our heads around, that would be really appreciated.
Sure. Thanks for the question, David. I might start off just by describing the change as it's much more holistic to the offer than just a simple rebranding or changing the signage. What I mean by that is, obviously, we moved to Liquorland as the master brand. Immediately, a benefit of that is we're able to be more focused with our marketing dollars. One of the benefits that we saw in the South Australian trial is that through having one brand to market in the state, we were able to increase the brand awareness with customers in a relatively short period of time. That's certainly a positive in terms of customer awareness. The other changes are then in terms of value.
Moving to one consistent price file and promotional program across all 995 stores is a benefit for customers just in terms of making our value simpler and more compelling. It stops us competing against ourselves across three different brands in any given week or period. That has allowed us to take the best of what the offers are across the three banners and bring those nationally to customers. The Price Match Promise is a great example of that, where we had that only in First Choice Liquor Market, and now that is national and something that customers are responding to. It is improving our value perception with customers, which is certainly a key element in terms of consideration. We then look at range as well.
Previously, the way we have ranged is there has been some range in our master ranging of Coles Liquor that would be restricted from certain banners. What we now move to is we move to one master range with a core ranging that will sit in each store. We have overlays based on the store, which is affluence, demographics, geographic locations that will make sure that the range that we are putting in stores is more focused on who that local customer is rather than just the sign that sits above the store. That is another positive for customers and a significant change to our offer. You look at loyalty. We are going from two loyalty programs down to one because Liquorland and First Choice have been on Flybuys, whereas Vintage Cellars had its own loyalty program.
Moving to one loyalty program was certainly a strong positive that we saw in the pilot. Lastly, I'd call out eCommerce or digital. At the moment, we've got three different sets of assets. There are three different websites, for example. Moving to one website where we can continue to develop and improve that one asset will allow us to move quicker and make more change for customers that's more effective. It is quite a large change for what our customer offer is. To go back to what your question was, which is what are the results that we'd seen out of that, I mentioned brand awareness has stepped on, which is great. In terms of our range perception with customers, when we measured that throughout the pilot, that had improved, as had our value perception, which is really key to getting more customers more often.
What we think we're doing here is taking a step back and not just rolling out the Liquorland offer to the other banners, but really taking a holistic step back from what our customer value proposition is and looking to improve that as much as possible. We saw positive results in terms of sales. That was led by transactions. That's what's given us the confidence to move forward and move forward at pace.
It seems like it's a blend of sales and efficiency. It looks like it's a blend of both or equal blend, it seems like, given your answer then, Mike. Is that a fair call, or would it be more skewed to efficiency than customer traction? I know it's a pretty hard question to answer, and maybe you're not comfortable doing that, but what would your overall?
It's a good question, David. Naturally, there are benefits in terms of efficiency. I would say that that comes from some practices at the moment that we do three different ways. We'll do those one way going forward. That's an efficiency benefit. I think there's also a bit of an execution dividend that you get, David, when you go from any time you have a good idea, we currently think about how do we do that three different ways. Now we think about how do we do it once. I think that will allow us to be more effective. Whilst there's a level of efficiency benefits there, and some of those we will look to reinvest where it makes sense, the number one reason for doing this is does it allow us to compete better in the market?
Because in the market that we're in, what we need is more customers more often. That is the real driver behind what we're doing here.
Yep. Yep. Understood. Yeah. Thanks, Mike. Great answer. Thank you.
There are no further questions at this time. I'll now hand back to Ms. Weckert for closing remarks.
Thank you all for your time this morning. In summary, I'd say overall, it's been a pleasing quarter, particularly on the back of our strong value offering, including our value campaigns and exclusive brand portfolio. As well, I think the momentum that we're seeing in the business, both in terms of the core trading and the transformation projects and the impact that they're having on the business. We're going to continue to focus on execution and delivering a superior experience for customers. All of that will be underpinned by great products at affordable prices. Now, I can't finish up today without mentioning a significant milestone for the Coles Group, which is that James Graham is retiring today as our inaugural chairman.
On behalf of the 115,000 team members at Coles, I want to say a very big thank you to James for his amazing contribution to the business over the past seven years. His passion and enthusiasm will be missed. We would also like to welcome Peter Allen into the role of chairman from tomorrow, and we look forward to working with him. I look forward to speaking to you all again at our full year results in August. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.