Thank you for standing by, and welcome to the Coles Group Limited FY20 Q1 Sales Results Conference. All participants are in a listening 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 Mr. Steven Cain, CEO. Please go ahead.
Thanks, Travis. And good morning, everyone, and welcome to our Q1 F20 Analyst Sales Call. I'm joined today by Leah Weckert, the Group's CFO, and members of our Investor Relations and Media team. Before I do a quick summary, I'd like to remind everyone that this is primarily a sales call. We've also got our AGM in two weeks' time, our first one, and we've got our half-year profits results in February. So I won't go through the whole release because no doubt you've had a chance to read it all. I will just talk to a few of the highlights that we're particularly pleased with in the quarter. First of all, Group sales at 1.8% was a good result in the context of a great quarter this time last year.
I think the two most notable achievements were obviously growing the comp sales in supermarkets and the first growth in fuel volumes that we've seen in four years, which was highlighted by Viva in their results yesterday. A couple of notable features, obviously Little Shop 2 was successful, but we also believe that lowering the cost of breakfast, lunch, and dinner, and What's for Dinner is resonating with consumers. From a sustainability perspective, we're very pleased that so many farmers applied to go to direct sourcing on milk, which gives them a better medium-term future as far as Victoria and central and southern New South Wales are concerned. The other thing that we've done in the quarter, which we're very happy about, is signing up to the renewable power farms, three of them, which will provide 10% of our total electricity usage in the future.
The other thing we're announcing today is the next collector scheme, which is glasses, which is the first time we've done something between liquor and supermarkets, and that runs through to the end of January, so a bonus for Coles shoppers over the next three months. So without any further ado, I'll hand over to you guys to sort of ask any questions. Thank you.
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 then two. If you are using a speakerphone, please pick up the handset to ask your question. We ask that questions be limited to two per person. The first question today comes from Michael Simotas from Jefferies. Please go ahead.
Good morning. First question for me is on the supermarkets. It looks like new spaces have contributed quite a bit more than it has for some time, about 1.5%, being well under 1% for a while. I just want to understand whether there's anything that's in the base bearing in mind the periods being shifted away and there's no statements associated with Flybuys that would have affected that or if that's the sort of run rate we should think about.
Yeah. Hi, Michael. It's Leah. Some of that is timing. So because the one and a half percentage points that you're looking at there is comparing a headline number, which is looking at weeks 1 to 13 as a comparison point. You're comparing that to the like-for-like, which is comparing to the weeks 2 to 14. The amount is slightly lower, so it's not that materially different to what we've seen in the past.
Okay. No, that's very helpful. Thank you. And the second question for me is on Express. It's obviously good to see the fuel volumes turn around. A couple of things on that. I just want to understand how much of a benefit you think Little Shop 2 was to fuel volumes during a time that Little Shop 2 was accepted in the same stations and it wasn't this time last year. And also, it looks like Viva's had to invest more than it probably planned to get that volume up and given what's happening with the broader fuel retail environment. Do you get the sense that there's continued appetite to invest and drive volume growth, or have we seen a step up and it probably levels off from here?
Okay. Thanks, Michael. A couple of questions. I think it's difficult to disaggregate Little Shop 2 from the price investment that Viva made. It was actually done deliberately together, but anecdotal evidence is that Little Shop 2 was very popular. And certainly, based on what we're seeing at the moment, given that Little Shop 2 is finished, it looks as though fuel volumes are pretty stable. So it looks as though there's been a bit of stickiness to what's happened. Certainly, based on what Viva said yesterday and the conversations that we have with each other, they're still very committed to that 70-75 million liter target.
Clearly, none of us know exactly when that might be, and it's still very much a sort of medium-term target, but we're delighted with getting to that 65 million liter level, which is important from our perspective from a profitability point of view.
That's very helpful. Thank you.
Thanks.
Thank you. The next question comes from Shaun Cousins from J.P. Morgan. Please go ahead.
Hi, thanks. Good morning, all. Just a question regarding the commentary on the second quarter. You highlighted you're trending towards the fourth quarter at 2.2. Sorry, maybe what does trending towards mean? I mean, are you at 2.2 or you're midway there between what you did in the first quarter and 2.2? I'm just curious, just trying to clarify the words you've provided, please.
Yeah. It means that if we were sort of 0.1% for the quarter, last quarter, sales are heading from 0.1% towards that 2.2%. It doesn't mean we're at 2.2%.
Okay, so just maybe in the middle, or would you be best for us to read that?
Yeah. We're not going to.
I'm just trying to interpret your words.
I'm not going to give any more detail than that, but we're on an improving trajectory, which is the key takeout. And if it was materially different to what we said, we would have said something else. So I think that's the best we can probably give you at the moment.
And then the second question, I guess, is just around sort of price investment. While obviously your quarter was assisted significantly by fresh and tobacco inflation, you've actually invested a bit more in dry grocery in the quarter relative to the fourth quarter. I think your dry inflation went from 0.7% to 0.2%. Should we expect that dry inflation should hover more around that flattish sort of type number like you've done in the first quarter rather than heading towards 1% and beyond there? And how do you fund that investment, particularly given you've highlighted poultry, which is a pretty difficult category in the industry and what proteins are in terms of feedstuffs there? I'm just curious, how should we think about inflation and dry going forward, and then how do you fund those investments, which seem to have worked for customers, as you've called out?
Yeah. A lot of what you've just talked about is obviously commercially sensitive, but the broad idea is, or certainly the way when we started to look at it, what we've got is an overall inflation number, which is stable from Q4 to Q1. It's been made up in different ways, as you've articulated. I think one of the key things that's going on at the moment is there is a bit of deflation coming into produce for the first time, which is good news for consumers. I spoke on the call earlier that bananas, as an example, I think they're 20% cheaper than last year. We are still seeing drought impacting certain states and certain product categories, which are dairy, wheat, and meat. So we're continuing to see cost price pressures in there. Some of that has moved into grocery products.
But overall, we're trying to deliver our strategy, which we've articulated, is inspiring customers through great value meal solutions. And part of the way we're investing is that we want people to get their dinner at Coles, so not one or two items, but to buy the whole thing there. And that's really what we've tried to do with the campaign, is to make meals easy and to make sure that those 40%-50% of people who don't know what they're going to put on the table that night have Coles at the top of their mind. So that's really what we've tried to do, and so far it seems to have been quite successful.
Coming out of the outlook for sort of dry inflation, would it be hovering around more a flat number? Is that the way to think about it? Because you control dry inflation much more than fresh and tobacco.
Yeah. It's not quite as easy as you might think, and it's different by category and it's different by supplier. We're seeing some categories where there's no inflation, and we're seeing other categories where it could be double-digit. And that really depends on what's in the product and everything else. And obviously, we scrutinize every single one and make sure that we only get through justified price increases. I might just hand over. So I think in short, I'm not going to give you a forecast on grocery price increases, but I'm happy to give you anecdotes of what's happening. Leah, did you have anything else to add to that?
One thing I would say about it, Shaun, is certainly one of the significant contributors to that number has been the price increases in milk because dairy is included in the package number, and as Steven said, we've had a process in place now for some time where if suppliers are coming to us with cost-price increases, which they can demonstrate there is real evidence behind cost increases flowing through into their business, then we will accept those, so I think it's hard for us to give you any guidance in terms of how the number will pan out because it does depend on what cost-price increases we get coming through from suppliers, but we'll continue to see the impact from the increases in milk over the next few quarters, and we will continue to assess CPIs as they come through from suppliers.
Okay. Great. Thank you very much.
Thank you. The next question comes from David Errington from Merrill Lynch. Please go ahead.
Good morning, Steve. Morning, Leah. Following that line of questioning on inflation, would it be true to say, and I don't want to put words in your mouth, but hopefully this is the case, that you're moving more to a less promotional type? Because I look at the price inflation in tobacco, fresh. I admit, like fourth quarter, first quarter, there has been a sizable step up, like 146 basis points improvement in price inflation. Now, this time last year, you had the very successful Little Shop, so I'm assuming that you did run hard on Flybuys. I don't know how that all works, but are you running less promotions now than what you may have based the business on some time ago?
And so following Shaun's question, are we now in a period where we can expect to see more stability because you are less promotional, you are more toward ready meals, you're more predictable, if you like? Is that a way of looking at this? Because I look at that number, and there does seem to be a step change happening in prices in dry grocery.
Yeah. I think certainly over the last few years, David, trying to reduce promotional intensity and increase the everyday value. It's fair to say in the first quarter, we did more activity in general, and particularly around things like Flybuys and so on, or targeted Flybuys, to make sure that we got the best outcome possible on the sales line. We were all very focused internally, both the merch teams, the marketing teams, and the stores. I was very keen to make sure that the 47 quarters turned into 48. So we obviously developed a sales plan, and it was actually very well executed. So I wouldn't sort of talk to the last quarter as being what we'll do every quarter, but strategically, over a number of years, promotional intensity has come down.
It will continue to directionally come down, and we will be focusing more on solutions like Dinner Tonight going forward.
Okay. No, that's good, and my second question is on online. A big pickup, 23% in the first quarter, oh, a very strong. Is it true? Was it fair that your online sales, I think, the full year were about AUD 1 billion? So is it right to read that you're getting around about AUD 230 million of annualized growth in online? So now you're starting to see a big pickup in the supermarket sales. It is now largely a large chunk of it is online. I mean, when I look at your total supermarket sales, I think it's AUD 150 million. You had a little bit of new store growth there. So a large chunk of the actual growth is online. Is that the way to look at it?
Yeah. Particularly this quarter, given the way the numbers panned out, it is driving growth. I think the way we looked at it was, if you look at it on a two-year view, I think this quarter last year was one of our highest growth quarters. And so when we look at the two-year stack for online, it was, I think, something like 60% growth in two years. So it's really powering forward. Clearly, and when you look at what it's as a percentage of sales, I think we've gone through 4% of sales for the first time this time as well. So yeah, a good business that's continuing to grow. And clearly, we're focused, as we've said before, on how do we improve the margins in that business over the next few years.
Is it pickup, Steven, or is it mainly delivery? I mean, you said pickup is strong, but I mean, I seem to see a lot more of the Coles Online trucks running around more than I ever did before. Is it home delivery that's really picking up, aligned with Uber Eats and that sort of stuff? Is that what's driving this?
It's both, really. They're both in double-digit growth. We have rolled out a few more Click and Collect throughout the network in the quarter we're talking about, but we're happy with both sides of the business. And Uber Eats, I think, has rolled out to 40 stores now. And again, what we're trying to focus on there is an alternative for dinner tonight. So if you're thinking about a takeaway, think about it from Coles, or if it's that emergency grocery top-up where you can't leave the kids or the matches on, then think about ordering through Uber Eats.
Thanks, Steven.
Okay. Thanks.
Thank you. The next question comes from Bryan Raymond from Citi. Please go ahead.
Good morning. My question is just on the pace of refurbishments that you guys are seeing. So you put out 10 during the quarter. Is it something you can strategize as well as accelerate? Just how far through that journey you are in terms of that quarterly run rate of refurbs and what you can expect going forward, whether that should be picking up? 40 annualized is still only. It doesn't feel like the rate you need to move the dial on sales. So could you just give some color around that, please?
Hi, Bryan. It's Leah. I mean, it's a fair observation from a run rate perspective. The thing with renewals in the business is they do tend to be quite sort of choppy in terms of how they get scheduled. So Q1 had them scheduled in at Q2, not a lot more. So we are currently on track still to be around the 75 renewals for the full year.
For the full year. Okay. That's great. And then when you talk a lot about inflation on the call, one area doesn't get as much attention is tobacco inflation. Obviously, there's excise in there and so on each year. But it gives us how that was during the quarter. Did that pick up, or was there a bit more promotional investment in that category?
Yeah. I mean, tobacco inflation is normally double-digit, as you know. We had a sort of mixed picture on tobacco. Well, we had our sales were impacted year on year. So one of the lower-performing categories, if you like, our best-performing category was convenience meals or the whole convenience section, and our sort of worst-performing category was tobacco. Clearly, what we're always trying to do is to make sure that the pricing is very competitive. So we've been doing a lot of work in that space.
Sorry, just to confirm that comment so you're saying tobacco was the worst-performing category in terms of sales in the first quarter, or was that a bit quiet, and you're able to address that through price in the first quarter?
No, in the first quarter. Yeah.
Right. Okay. And then the last one for me, just quick one. Why has Liquorland slowed so much? You mentioned some of the story picking up with the renewals and the new brand there, but liquor had been quite strong for some time. Just interested in why that's hard to follow.
Yeah. Well, first of all, it's fair to say that the liquor business has improved in the second quarter, and some of the reason for that is that we're looking at some movement in holidays, the NRL Grand Final, and so on. So you'll see an improved result in the second quarter, I expect. If you look at the three brands, things always cycle, and it's fair to say that Liquorland has been the powerhouse for the last few years. Particularly, it's fair to say that First Choice Liquor Market is currently driving most of the sales. I think when you look at where the renewal programs are, First Choice Liquor Market is currently rolling out. Liquorland has mostly completed its, and so we're in the process now of what's the next generation of formats for Liquorland.
I think that if you look at the liquor market as to what's growing and what's not at the moment, spirits is the highest-growth category, and RTDs are the lowest-growth or the worst-performing category. It's making sure that you've got your mix right in the stores to take advantage of the growth that's out there. We will continue to sort of try and drive spirits, the move to own brand, and the drive to online sales as the way forward in that business.
Okay. Great. Thank you.
Thanks.
Thank you. The next question comes from Andrew McLennan from Goldman Sachs. Please go ahead.
Good morning, everyone. Just wanted to ask around the refurb progress and just the response you're seeing. You do mention a little bit in terms of The Glen and Eastgardens, but I'm particularly keen in terms of your view on the Format A versus the Format C stores to see a bit more color around the progress there. Also, we're seeing within stores some of the shelving getting prepared for its ranges. So just wanted to talk, given you've got so many that you're looking to roll out, the 100 or so before the end of the calendar year, just how that's going. You're calling that out as a performing category, but it's going from a very low-quality positioning to a much more significant presentation within the store.
Just to get your thoughts about how you're seeing that as a driver of sales and also the potential for returns there?
Yeah. Good question, Lee. Both A and C store programs are rolling along well. The Glen results are terrific, as was Eastgardens. And then we're seeing some encouraging results in all of the Format C's that we've done as well, where obviously we're moving the south side of deli in some of those stores, but we're also incorporating fresh bread from the nearest Coles in-store bakery as well. So we're pleased with those and obviously looking to accelerate the rollout of those over the remainder of the year. I think on the convenience layouts, I think we've got 40 stores with the extended range at the moment, or about 40, and yeah, we're hoping to get to 100 by December. Clearly, it's driving sales.
The art of it, though, when you're increasing the range so quickly in lots of different store types and locations is to obviously manage the waste and markdown as well. So that's what the team is focusing on now, is quickly coming to new operating standards for all of that range with the stores.
You're happy. I know previously you've been talking about the small basket growth wasn't coming through in line with market. In those three stores, is that something you're already seeing, or is it the existing customer that's coming for a big basket shop that's actually picking up these convenience products?
Yeah. Well, I won't dissect the performance of the 40, but what we would say overall is that we're seeing an improving trend on transactions in the business. And to some extent, that'll be driven by the ranging. But I also think that the What's for Dinner campaign is also probably making Coles more relevant every night of the week and giving people a solution every night of the week. So we're pleased with how that's been received so far.
Yeah. It's quite a visible campaign. Okay. And just quickly, in relation to second quarter, you've obviously provided the commentary that you've seen an acceleration that's important to see. But when you look back, and certainly the channel feedback from suppliers, it was just recognizing that the second quarter last year was incredibly impacted adversely by weather and potentially some other factors and presents as a very low base compared to the sort of trading experience on either side. Second quarter is incredibly important period for profitability. I'm just wondering whether you're happy with that acceleration you've seen to date and how you're positioning yourself to take advantage of what should be a pretty strong quarter.
Yeah. I mean, the one thing I've come to sort of accept in Australia is that I'm never going to forecast the weather and when the next event will hit or where it will hit. So it was a disrupted Christmas season last year. You're absolutely right. I think we had a record number of stores out and all of that sort of stuff. And there's no reason to believe it won't happen again, by the way, given the way things are. But that's one side. I think we've got. We're encouraged by current trading, and we're encouraged by the plan we've got for Christmas, which we launched a couple of weeks ago in Sydney. We've got a lot of great ranges out there that are not only great value, but hopefully, it'll be easiest to entertain this Christmas at Coles.
And then that's complemented, of course, with the launch of the glass promotion that we've announced today, which is the first one in conjunction between supermarkets and liquor. So I think to the extent that you can be in a good place, I think we're feeling that we've done as much as we can do to make sure we have a successful Christmas season. But obviously, we don't know what competitors are going to do, and we don't know what the weather's going to be like.
Sure. Thank you.
Thank you. The next question comes from Ben Gilbert from UBS. Please go ahead.
Good morning, Steven.
Hi.
Just first question. Just first question for me, I wonder if you could just talk about how you're seeing Coles' performance in the context of the market at the moment. My understanding is that the market's price accelerated quite significantly over the last sort of 12, 13 weeks, and particularly around just sort of traffic trends and also around price perception. Because it looks like the pricing gap between yourselves has probably pushed out a little bit, particularly because of Woolies.
Yeah. I think it's difficult to look at the quarter in isolation, given the events of last year, so when you get spikes like that, we tend to look at it on a two-year basis as well, and certainly, when we look at our performance on a two-year basis, it's in a very good place right now, and when we look at our market share numbers month on month, we're feeling that, again, we're performing reasonably well. As I've just said, transactions are improving in the business, which we're very happy about, so I think overall, the last year to one side, which was a record quarter, I feel as though the strategy is paying off.
There's a lot, although the inflation is consistent, what we are seeing is that there is the average selling price is moving up, and that's due to people trading into more premium products as well. So I think we're in a reasonably solid space at the moment.
Great. And just following up, just mentioned your comment before about sort of making sure you got the fourth period of growth. Just in terms of what you're doing with that, because I noticed you're obviously in the free delivery on online orders through September over, I think, AUD 100. Were you just pushing a bit harder around certain areas? And I suppose in that context, just how you're still seeing cost growth for the third period?
Yeah. We were certainly pushing hard is a good word. There were a couple of good words. We were certainly pushing hard, and it was a number of things. One is there's a lot of range change going on in the business, and that's having a positive impact. I think the marketing campaigns have landed well with customers. We did have some very strong Flybuys activity, and we saw Flybuys membership continue to grow, and home shopping, as we've said already, has passed through 4% of sales. Clearly, we'll talk about margins and profitability and all of that in February, but we feel as though we're in a solid space at the moment overall.
Okay. Thanks very much.
Thanks.
Thank you. The next question comes from Nirav Shah from Morgan Stanley. Please go ahead.
Hi guys. It's Nirav Shah here from Morgan Stanley. Just a quick one from me around Smarter Selling. I guess that this is primarily a sales call, but some pretty meaningful injections in roles at the SSC late last year, and just wanted to get your sense of some color on how the business is handling that and coping with that operationally.
Yeah. I think it's coping very well. We've just had another Pulse Culture Survey, and the results were very promising. So I think as far as these things can be done, they've been executed well so far. So we've spent a lot of time talking about how these changes will happen and to make it as seamless as we possibly can be.
Just, I guess, following up on that, I was just wondering if you could comment on sort of how you're tracking towards that AUD 150 million of annualized Smarter Selling savings at this stage?
Yeah. We'll give you a full update at the half year, but again, we're in a, I think at the moment, a solid position in that regard.
Thank you.
Thank you. The next question comes from Richard Barwick from CLSA. Please go ahead.
Good morning. Can I just clarify your Format C stores? You've opened four of these during the quarter, but if I look back to what you talked about in the strategy day, which you then reiterated at the result, you didn't mention any Format C stores in terms of openings. You talked about opening 10 new Format A's and Format B's with some replacements. So is this a change, or is it a case of some of the existing stores that would have been a Format A and Format B have been redesignated as a Format C? And then as a part of that, are the Format C stores, how do they compare in size relative to your Format A's and B's? Are they the same size?
Yeah. I think it's just an interpretation. We're not. I don't think we're planning to open any Format C stores. Those are renewals of existing Format C's. The ones that we're opening at the moment are, we hope, as many Format A's as possible, the odd Format B, and then obviously we've got some Coles Local activity going on as well.
I think in the. I'm just having a look back at the investor day, Richard, the Format A, Format B, and Format C, we had the 10 by 20 rollout plan. The thing that spanned all three of those was around 75 renewals. So to Steven's point, we weren't aiming to open any Format C's, but we were planning to have within the renewal plan conversions to Format C of a number of stores, and that's what all of these ones we've mentioned today are.
Okay. I'm a little bit confused by that because you've opened four stores, and it reads in the text that one of those is a Format A and three a Format C, which suggests they're new stores.
None of those Format C ones are new openings. They're conversions of stores that were already there.
Okay. So therefore, you're confirming that the four new stores were basically all Format A's?
No. I see what you mean. What it means, when it says an additional Format A store was opened at The Glen, that was already a store, but it opened as a Format A. It wasn't a Format A before it became one. They're all B's until they become an A, B, or C.
Right. Okay. All right. Okay. That's quite confusing the way it's worded here. Just when you're opening four, it looks like you've got a three and a one. Okay. So you're really talking about a refurb of existing stores and, as you say, tweaking from a B to either an A or a C. And the way that we should be thinking about new store openings then is they're going to be A's or B's?
Yeah, and the odd local.
Okay. And also the point is that it doesn't matter because you're talking refurbs, etc., there's no size difference between an A, a B, or a C?
No.
Okay. All right. That is clear. Thank you.
All right. Thank you. Sorry about that.
Thank you. The next question comes from Annabel Dymond from Credit Suisse. Please go ahead.
Good morning, everyone. I just wanted to follow up on the question with pricing relative to Aldi. Just wondering whether you could firstly just comment on whether you have observed the price gap increase over the last few quarters, and secondly, whether you are comfortable with your current price position relative to Aldi.
Yeah. I mean, obviously, we monitor a lot of pricing activity every week. I think we would say that we have improved our price gap versus Aldi in the quarter, but we're not going to get into the detail. It certainly hasn't increased. So I'm not quite sure where that's come from.
Okay. No worries, and I just wanted to get your thoughts as well on exclusive brands penetration across supermarkets and liquor. Just how you're feeling about current penetration levels and whether you sort of have a target in mind in particular for the liquor business.
Yeah. I think we had a really successful quarter. I think versus the same quarter last year, I think penetration is up almost 100 basis points, and we're beginning to make some inroads into categories that have been quite challenging in the past, like coffee and so on, as well as all of the fresh areas where we've been more successful.
Liquor, do you sort of have a target in mind? You mentioned, I think, it was an 18% or so. Would you like that penetration of exclusive brands in stores to increase?
I think there might be a few different numbers out here. So are we talking about supermarkets or liquor?
Liquor now.
Oh, sorry. Liquor. Okay. Yeah. Sorry. On liquor, we're continuing to see an improvement in, I'll take back what I said about coffee. Apologies.
It's all good. I asked about bread, so that's fine.
We're not yet selling coffee in any of our liquor stores. Yeah. The exclusive brands offer continues to go from strength to strength, as they say, in liquor. And we're seeing plenty of awards being won by products that are out there as well.
Would you like that 19% contribution to increase?
Yes. We haven't specifically talked about targets in liquor, but we want to continue to sort of build that program. And it's the same as in supermarkets, which is if you've got a great brand and you're innovating, I'd expect that you'd still continue to increase your sales with us. It's about just getting that mix right for customers.
Okay. Great. Thank you.
Thank you. The next question comes from Dan Bosscher from Perennial Value. Please go ahead.
Oh, hi. I was just asking about that 2.2 number. And why is it 2.1 or 2.3? And I'm guessing it's because 2.2 is what the four-quarter was? Three-quarter was? Is that right?
Yeah. That's right. Yeah. It's just a benchmark that's already out there. I wouldn't read into the precise numbers. It's just talking about directionally where we're heading.
Yeah. Yeah. That makes perfect sense. If you're referencing four-quarter, that's fine. Thank you.
Okay. Thanks.
Thank you. The next question comes from Phil Kimber from Evans & Partners. Please go ahead.
Hi, guys. I just wanted to ask on that second quarter momentum, and I missed the start of the call. Sorry. So it sounds like you've referenced it versus fourth quarter last year. It's all a base effect. What should we be sort of thinking about why it wouldn't just bounce straight back to that number, especially if inflation's picked up a little bit since then? Is it just because Little Shop went over a little bit into the second quarter last year? I mean, what are the things that we should sort of be thinking about in terms of commentary? Because I would have thought once the base effects wash through, it just bounces straight back to the old run rate.
Yeah. It's a good question, and there's just a huge number of moving parts. So we can see from week to week the sales move around. It's not like it is even within that Q4, you get some weeks that are a lot better than others. So it's never the same number every week, or certainly I've observed it's not the same number every week. All you can do is talk about directions, and directionally we're heading back to that sort of point. And there's so many moving parts externally, it's difficult to be precise or forecast what the next week, eight weeks holds for us. But to the extent that we feel as though we've got a good plan and that we're comfortable with current trading, we are.
Okay. And then my second question was just around net selling area you've shown in the release for supermarkets. It was up 1.9%, which is a bit of an acceleration. I mean, is that a timing issue, or is that sort of a useful number to think about for the whole of fiscal 2020?
Sorry. Which?
The net selling area on supermarkets.
Do you want to answer that one?
Yeah. I'll answer that one. It's more timing than anything. When we land new stores, again, like renewals, it's a bit choppy. So it depends when developments come on and the like. I mean, as we indicated at the investor presentation, we're sort of targeting now, sort of starting to slow that between 1.5%-2%, and so we have a plan that helps us to get there over the next few years.
Okay. So 1.5 to 2 is sort of still the plan for the full year, or 2 drifting down to 1.5 is the plan for the full year?
Yeah. Well, we're coming off a property pipeline that's well in place, so moving down.
Yep. Okay. Thank you.
Thank you. The next question comes from Scott Ryall from Rimor Equity Research. Please go ahead.
Thank you. I've got two questions. First, the timing of doing promotional activity between supermarkets and liquor is quite interesting given your major competitors in the process of merging liquor. I'm just trying to get a sense of, Steven, what you're trying to find out. Obviously, it's trying to drive sales. But are you trying to figure out if it's a good strategy between the two businesses? Are you taking advantage potentially of some competitor, I guess, lack of focus on the biggest deal like that through the merger, which is natural? Could you just comment on the timing and the fact that this is the first one we've seen, please?
Yeah. And I think we're trying to plow our own furrow on this one. I mean, I think what we're trying to do is think collectively, and it's a bit like the little shop too. That was the first time that ran in Coles Express. This is the first time we've run a program with liquor. One of the key things we're trying to do is to drive more sales and make shopping easier for customers. And certainly, our analytics suggest that something like only one in 20 Coles customers goes and buys a liquor from Liquorland at the same time. And for us, that's a massive sales opportunity if we can drive habits in that direction.
Okay. Good. The analytics team has answered my question. And then the second one, you talked a little bit earlier on the call about the meal deals, costs, and general, all those sorts of things in the context of food price inflation. Obviously, the proteins and the produce that go into those meal kits are a little bit all over the place at the moment. So can you just clarify, how do you guys think about balancing value versus popularity, I guess, in the sense of red meat prices are probably going to escalate faster than poultry in the next 12 months or so? There's a whole heap of moving factors here. How do you, I guess, make the decision as to what you price things at, please?
Yeah. Well, it's fair to say that the chicken movement has been going on for years, and it is now by far and away the most popular protein, and it's still the highest growth one. And so when we're thinking through recipes and what to focus on, that's one of the reasons why when we reduced the cost of breakfast, lunch, and dinner, why we focused on chicken first and foremost, with the additional benefit that it's also the healthiest white mainstream meat as well. And then on other nights, you can have a taco, which is made from Curtis's mince, which is an exclusive product with Coles. So what we're trying to do is focus on value ingredients, but also things that are easy to put together.
And I think in online, we've also been experimenting with trying to group the recipes together so that you can click on tacos, and everything gets thrown into your order. So we're constantly thinking about how to provide better value meal solutions as easy as possible for our customers.
Yeah. And if you guys decide you need to change, I don't know, the protein or whatever the produce is in the meal kit, how quickly can you implement that? Because obviously, well, I would expect it to scale and through people's systems, and it might take a little bit of time to change. But how often can you change these things? Is it a once-a-month thing, once every two weeks? Can you think about how dynamic you can be with changes in the market?
Yeah. It can be reasonably dynamic. I mean, obviously, chickens grow a lot faster than a cow, so that's helpful. But yeah, obviously, we've got to keep our eye on what's happening around the country as far as what's in plentiful supply from a produce perspective and what might be increasing in price because of drought or some weather impact or those sort of things. So we're trying to be as dynamic as possible, but also trying to keep it simple for the stores and for our customers.
Okay. Brilliant. Thank you. That's all I had.
Thank you. At this time, there are no further questions. I'll hand back to Mr. Cain for closing remarks.
Okay. Thank you very much for your time this morning, everyone. We look forward to either seeing you at the AGM or later in February for our half-year results. And if we don't see you, all the best for the Christmas and the holiday season. Thank you.