Coles. Stuart McEvoy for The Australian.
Coles. Stuart McEvoy for The Australian.

Coles’ new deal to lure customers

COLES is offering free home delivery for the first time to its Australian customers, which is set to create more rivalry with their direct competitor, Woolworths.

The offer, which is only available through Coles Online, starts from today and will continue for the rest of the month of September.

In a statement to News Corp Australia, Coles said any Coles Online customers who spend more than $100 in one transaction and place their order September 30 this year can have their groceries delivered to their door or kitchen bench without having to pay a delivery fee.

Customers who go online and buy their groceries through Click & Collect will also be able to save $10 off.

However, they must spend $150 or more and place their order by October 10.

A Coles spokeswoman told News Corp the deal only applies to purchases made on the Coles Online website, not eBay where Coles does sell some of its products.

Coles Online General Manager Karen Donaldson said customers had increased their online orders by 30 per cent to more than $1.1 billon.

"As the weather warms up, we know customers want to get out and enjoy themselves, so we are helping do the grocery shopping for them by offering big savings and great deals when they shop online," Ms Donaldson said.

 

Coles is offering free delivery on its website. Picture: Supplied
Coles is offering free delivery on its website. Picture: Supplied


"Not only has Coles increased our Click & Collect locations to more than 1000 across Australia, we have made significant investments in the technology behind our home delivery service to reduce delivery times for customers."

Ms Donaldson said the demand for online deliveries have meant the supermarket has increased its delivery slots. it is also offering shorter delivery windows so shoppers can save time on waiting for groceries to arrive.

The news comes as Coles surprised investors with a special dividend despite an 8.1 per cent fall in full-year earnings following its demerger from Wesfarmers.

In August, retail earnings dropped to $1.32 billion as modest sales growth from supermarkets and liquor stacked up against falls from fuel and convenience, plus the costs of restructuring following November's spin-off and listing.

Statutory profit for the 12 months to June 30, which included earnings from Kmart, Officeworks and Target prior to separation, dropped 9.1 per cent to $1.43 billion.

Coles made a $145.8 million provision for redundancies and lease exit costs as it got to work overhauling its supply chain.

 

Coles are offering free delivery for customers who shop online. Picture: Supplied
Coles are offering free delivery for customers who shop online. Picture: Supplied

 

Statutory revenue was down 1.7 per cent to $38.4 billion but chief executive Steven Cain said Coles had made a solid start to its four-year transformation program.

"It has been a year of substantial change for Coles following the successful demerger and ASX listing," Mr Cain said.

"Consumer behaviours are changing faster than ever, we are heading into the most competitive period in Coles' history, and there are significant industry-wide cost headwinds."

Mr Cain said he expected full-year 2020 earnings growth to remain subdued.

Coles reported comparable sales growth of 2.7 per cent for its supermarkets to $1.2 billion, while liquor sales grew 1.2 per cent on a comparable basis.

Combined comparable food and liquor sales grew 1.1 per cent in the group's final year under Wesfarmers' wing.

The Little Shop and Fresh Stikeez novelty giveaways had created strong customer engagement but Mr Cain admitted rival Woolworths' Ooshies scheme had created significant competition.

Chief financial officer Leah Weckert said the primary driver of the earnings decline was lower fuel volumes through its Express service stations.

- with AAP