Australian grocery chain Coles has initiated requests for increased product shipments following a deceleration in inflation that has spurred consumer purchasing. This has resulted in a notable uplift in its March quarter supermarket sales. The retailer, a key player in the Australian grocery market alongside Woolworths, reported a modest rise of 1.9% in shelf prices, a significant drop from the 6.4% increase seen a year prior, attributing the decrease to lower costs of apples, avocados, and red meat. This adjustment in pricing contributed to a 5.1% growth in supermarket sales, reaching AS9.1 billion over the 12 weeks ending March 24, surpassing analyst expectations of below 5% growth.
Coles CEO Leah Weckert highlighted the company's ongoing dialogues with suppliers aimed at boosting volume and promotional activities to further stimulate sales growth. This financial performance update comes at a crucial time, potentially alleviating political pressures facing Coles and Woolworths regarding their role in the cost of living crisis and food insecurity in Australia. The government has hinted at possible regulatory interventions, including enforcing an industry code of conduct with penalties and contemplating measures to dismantle the duopoly should they fail to address these societal concerns adequately.