Coles' plastic toy and bag strategy pays off (in the short-term)
The AFR reported that Coles' same-store supermarket sales grew faster than Woolworths for the first time in two years during the September quarter. Coles lifted profit by 6% and sales by as much as 7%, boosted by its Little Shop promotion and backflip over plastic bags. The stronger sales and earnings momentum will serve Westfarmers well as it prepares to seek shareholder approval for the proposed $20 billion demerger of Coles in November. However, analysts believe that the gains are unlikely to be sustained, shoppers who switched to Coles during this period will switch back, and Coles' same-store sales growth will slow to around 2.5%.