Coles bullish as competition heats up

AUSTRALIA’S grocery sector is on the cusp of its most competitive era “ever” as more players forge into the market, Coles managing director Steven Cain says.

And consumers are rapidly changing their behaviour and expectations as technology and alternative offerings upend traditional shopping habits, the grocer says.

But Coles can prosper amid the disruption and grow sustainably for a second century, in part by being “customer obsessed” and becoming Australia’s most trusted retailer, Mr Cain says.

Unveiling his blueprint for growth at the nation’s second biggest supermarket chain yesterday, he said the industry was poised for an era marked by fierce competition.

“I do see the next five years in the grocery sector as the most competitive that we will ever see,” Mr Cain said.

The existing grocers in the Australian market were improving their offerings, while new players were “coming to town”, and consumers, with changing demands and an increasing range of options, were “fragmenting” into groups, he said. That meant “there is quite a challenge out there to maintain market share and grow profitability”.

Mr Cain said Coles would target $1 billion in cumulative cost savings over the next four years, and the company would not hesitate to shutter unprofitable stores.

He was speaking at the first “investor day” hosted by the grocer since he took the reins last September.

His strategic update comes as German retail titan Schwarz Group prepares to launch Kaufland — a chain of big-box “hypermarkets” — in Australia later this year.