Coles takes big hit at the petrol pump

COLES has pointed the finger at its petrol supplier, Viva Energy, for lifting the prices it charges the supermarket heavyweight after a 20 per cent plunge in fuel sales.

Coles is under pressure as its key grocery business has all but ground to a halt as Woolworths ups its game and Aldi expands its footprint.

Its like-for-like food and liquor sales rose a meagre 0.3 per cent in the three months to March, compared with the same quarter a year ago, an update from parent group Wesfarmers revealed yesterday.

It was the weakest sales growth posted by the supermarket chain since Wesfarmers bought the business almost a decade ago.

The amount of fuel sold at Coles Express service stations tumbled 20.7 per cent as motorists increasingly turned elsewhere.

Like-for-like sales volumes — a measure that strips out the impact from petrol stations that have opened or closed — were down 16 per cent.

Coles managing director John Durkan said the retailer, which has 698 petrol stations, was being forced to pay more for the fuel it bought from Viva.

“We’ve had to reflect some of that at the pump, which has had some effect on volumes,” Mr Durkan told analysts.

“We’re in dialogue with our partner and I expect to be able to cycle our way through this over the fullness of time.”

Viva, owned by Dutch commodities trading titan Vitol, became exclusive supplier to Coles when it bought Shell’s service station network in 2014.

Wesfarmers problem child Target continued to lose ground, with headline sales plunging 18.1 per cent to $555 million, offset by a 2.5 per cent rise in sales at Kmart to $1.1 billion.

Shares in Wesfarmers closed 1.5 per cent lower yesterday at $43.30.