Coles Group is Australia's second largest grocery and drinks retailer, engaged in a fierce longstanding rivalry with Woolworths. For years the local #1, Coles lost its way in the mid-2000s and was eventually acquired by diversified conglomerate Wesfarmers. However, a complete turnaround took several years to materialise, and progress was further complicated by Wesfarmers' own disastrous attempt to establish a presence in the UK with the acquisition of local home improvement chain Homebase. Shortly afterwards, Wesfarmers announced plans to spin off Coles Group as a separate entity. Wesfarmers retains a 15% shareholding. Independent once more, Coles Group's core business remains food and liquor retail. Coles has around 824 stores nationally as well as a large online operation, and operates a separate chain of 713 Coles Express fuel and convenience stores (in a partnership with Shell). However despite its dramatically improved performance in recent years, the group continues to lag behind Woolworths with around 29% groceries market share in 2020 (to its rival's 32%). It is generally considered the more mass-market of the two chains, as a result of a traditional emphasis on price cutting. For years, British rock band Status Quo were featured in its advertising, playing their song 'Down Down'. More recently Coles has attempted to move upmarket with a partnership with TV chef Curtis Stone and by highlighting its fresh food offering. Both companies face intense competition from disruptor Aldi (12% share in 2020) as well as from regional specialist IGA. The supermarkets are partnered by a collection of 910 mostly freestanding liquor retail outlets operating under the Liquorland, First Choice and Vintage Cellars banners. Spirit Hotels, a chain of pubs and bars, were sold in 2019 to investment company KKR. Coles and Wesfarmers jointly operate Australia's largest loyalty programme, Flybuys, with 8.6m active members. Steve Cain is group CEO. Combined revenues for the year ending Jun 2020 were A$37.4bn (approx US25.8bn) with net profit of A$978m. Both figures are still below past highs. Performance was significantly impacted during the Covid impact by plunging fuel sales in the Coles Express division, although sales from supermarkets and from liquor increased.
Capsule checked 16th April 2021
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