Grocery story
As customer preferences shifted to dining at home, the supermarket sales rose by 3.7%. Pixabay

Australia's second-largest supermarket chain, Coles, posted a surge in its annual profit to AU$1.1 billion, after improving its market position by selling its own brand sales and boosting e-commerce sales.

Due to the low inflation rate, prices were more stable, which attracted budget-conscious customers.

The grocer's shares rose up by 2.4%, and even reached 3.2% earlier in the day to AU$19.050, their highest since August 2022, reported Reuters.

Though dairy prices were rising, suppliers didn't raise their prices, which helped keep the costs stable for customers.

As customer preferences shifted to dining at home, the supermarket sales rose by 3.7% in the first eight weeks of fiscal 2025, and revenue from the supermarket rose by 4.3% to AU$39.04 billion.

Coles chief executive, Leah Weckert, said the supermarket sales soared as "a lot of Australians were choosing to eat out less and eating at home more."

"They're looking to replicate some of the experiences that they would have had when they were eating out by buying products that might be a little more premium or a little more special when they come in to shop with us." The Guardian quoted Weckert as saying.

Apart from sale of its own brands and online channels, Coles attributed its high revenue to seasonal campaigns and strong trade during Christmas and Easter.

A year ago, Coles reported a profit margin of 5.2% in its supermarket division, up from 4.8%. The figure is higher than its overseas peers.

Greens senator Nick McKim, who chaired the Senate committee into supermarket pricing earlier this year, called the Coles' profits a "sick joke," as Australians were struggling with high cost of living expenses.

"Coles is cashing in on a crisis. They are price-gouging as food prices continue to drive Australia's stubbornly high inflation numbers. This is corporate greed at its ugliest," McKim said.

Coles' rival Woolworths is expected to report its 2023-24 results on Wednesday. The two supermarket chains control two-thirds of the Australian market.