Party takes a sober turn

It was great fun for the supermarkets while it lasted, but the pandemic has changed the way we shop

- JAMES CARLISLE

After the party, the hangover. But it was Woolies, rather than Coles, that remembered to drink a glass of water before bedtime. While the recent interim results showed that like-for-like sales growth remains elevated, for Woolworths it slowed from 11.5% in the first quarter to 7.1% in the second and from 9.7% to 5% for Coles.

As the chart shows, both companies now lag overall food industry sales growth of 13.9% and 10.8%. Yet it is Woolies outperforming Coles on key industry metrics.

What’s going on? The pandemic has brought about a shift in how people shop, with many preferring local stores over major shopping centres.

The relatively strong performance from Coles Express, which saw like-for-like sales growth of 9.9% in the half, made the point. Sales growth in this division, which focuses on convenience locations like service stations, was almost twice that of the overall group.

The full-year results from Metcash, owner of the IGA chain of smaller and more locally based supermarkets, are likely to emphasise it. The pandemic has made local shopping more popular.