Federal Court ruling, setback to Coles Group

COL achieved strong supermarket sales growth in Q3 FY2026, supported by promotions, online expansion and higher customer engagement. Though, liquor sales were weaker and rising cost pressures plus softer demand may weigh on near term performance.

Coles Group Limited (ASX: COL) 

on 14 May 2026 said it acknowledges a Federal Court ruling in an ACCC case over its “Down Down” promotion for 245 products. The Court found price increases were due to supplier costs and justified but ruled the promotion was misleading because products needed a 12-week gap after a price rise before being advertised as “Down Down.

Coles Group Limited on 1 May 2026 shared its 3Q Sales Results. COL achieved strong momentum in its Supermarkets business during the third quarter of FY2026. Sales revenue reached $9.8 billion which was 4.0% higher than the previous corresponding period while comparable sales grew by 3.6%. Growth came from value-focused offers including weekly promotions expanded everyday value products and summer campaigns. Demand for pantry items also lifted during March due to uncertainty linked to the Middle East situation. 

Customer Growth and eCommerce

Customer engagement continued to improve across the quarter. Flybuys active members increased by 5% to 10.3 million whereas Coles Plus and Coles Plus Saver subscriptions jumped 75% as shoppers searched for more savings. 

eCommerce sales grew strongly by 24.8% and online penetration increased to 13.6%. In March online penetration reached 14.2% showing ongoing demand across all fulfilment channels. 
During the quarter the company completed 17 supermarket renewals and opened two new supermarkets including an integrated food and liquor store in Glen Iris Victoria.

Other Segment Update

Liquor sales revenue fell by 3.9% to $781 million while comparable sales declined by 4.3%. Convenience stores remained relatively stable although warehouse locations faced weaker trading conditions. Consumer spending softened further during March amid geopolitical uncertainty which affected overall liquor demand. The business continued focusing on convenience trusted pricing and combining food and drink offers to improve customer experience. Customer satisfaction measures improved following the Liquorland banner simplification while Flybuys swipe rates increased by 7.2%. Online liquor sales increased by 1.8% with penetration reaching 7.4% or 8.6% including liquor sold through Coles Online. One new liquor store opened during the quarter while 14 stores closed and two stores were renewed.

The Other segment recorded revenue of $141 million linked to the Product Supply Agreement with Viva Energy Group Ltd which is expected to expire by the end of November 2026.

Outlook 

In the early weeks of the fourth quarter supermarket sales growth remained broadly consistent with third quarter levels. The company noted rising fuel freight packaging and commodity costs due to geopolitical tensions. Supplier requests for higher prices have also increased. 

The business plans to manage these pressures carefully while continuing to offer customers value and affordable meal solutions as more households shift towards cooking at home. In Liquor weaker consumer sentiment seen during March has continued into the fourth quarter which is expected to affect earnings during the second half of FY2026.

(Source: Company Report)