No festive reason for Coles

COLES’ supermarket sales slowed during the run-up to Christmas, with the newly demerged retailer’s first-half profit slipping 29 per cent to $381 million as restructuring costs weighed on its balance sheet.

The company’s maiden interim report since its spin-off from Wesfarmers shows a 2 per cent lift in half-year revenue to $20.35 billion, largely due to a 3.1 per cent growth in supermarket sales to $15.72 billion, boosted by the “Little Shop” campaign.

But Coles’ sales slowed towards the back end of 2018, while a previously announced $146 million restructuring provision bored a hole in the overall result as the company prepares to modernise its distribution network as a standalone retailer.

Coles announced in January it will spend about $950 million over six years to modernise the company’s supply chain - including two new automated ambient distribution centres. Shareholders were seemingly unimpressed by the performance, with Coles shares dipping by as much as 3.3 per cent to $12.18 on Tuesday, compared to the $12.49 listing price in November.