Woolworths vs Coles: which do you prefer?

Hey Aussie,

When doing your weekly shop, you've likely noticed that your dollarydoos just aren't stretching as far as they used to.The price of everyday food items has soared in recent weeks with farmers passing on rising production costs to consumers.Due to high inflation and successive interest rate increases by the Australian Federal Reserve, consumers' enthusiasm for retaliatory spending has waned this year, as they have reduced recreational spending as well as spending less on non-essential consumer goods.

Since Coles and Woolworths are belong to the essential consumer goods sector, which has been less affected by the rally over the past two months, the essential consumer goods sector has clearly outperformed than others. However, both stocks have declined recently. What has happened?$Coles Group(COL.AU)$ $WOOLWORTHS GROUP LTD(WOW.AU)$

Woolworths posts tepid annual profit, weak start to 2023

$WOOLWORTHS GROUP LTD(WOW.AU)$currently has four major business segments: Australian food retail, Australian food wholesale, New Zealand food and Big W business.

It posted a nearly flat annual profit last week.Total sales at Australian Food segment for the first eight weeks of fiscal 2023 were down 0.5% from last year. Sales in its New Zealand Food segment were down 1% during the same period.

This was mainly due to supply chain snarls have dented sales of its key Australian Food business at the start of the new fiscal year.Bad weather and floods have blocked roads and wiped out crops, increasing wholesale costs. The cost of doing business, excluding one-off expenses, increased 96 basis points (bps) to 25.1% for Australian Food in the reported period.

Coles warns of cost pressures

Since its spin-off from Westfarmers,$Coles Group(COL.AU)$ has maintained a relatively simple business structure, with three divisions - supermarkets, liquor, and express.

There was a 2.2 percent increase in supermarket revenue, accounting for 87 percent of total revenue, and a 2.5 percent increase in liquor business. The express division, however, saw a five percent decrease in sales as a result of reduced traffic flow caused by theOmicron virus in the first half of the year, as well as flooding in the second half of the year, leading to the closure of 30 gas stations and an increase in oil and fuel prices.

However, the company achieved a 4.3% increase in net profit after tax to $1,048 million, exceeding analysts' expectations of $1,006 million.

Coles vs Woolworths price war

Price wars also affect the share price movements of the two supermarkets in addition to the earnings report. While consumer discretionary is a defensive and anti-cyclical sector, the supermarket and grocery sector is one of the most competitive in Australia.

Woolworths & Coles have released price reductions in an attempt to expand market share. Woolworths has announced price drops for over 400 essential items. Coles supermarket has “locked” the price of 1,168 products across its range until early 2023 - and has already begun lowering the price of an additional 500 buys

After  the two supermarkets are currently engaged in a price war, which is expected to adversely affect the company's gross profit in the coming six months, which will in turn affect its stock price.

Finally, we would like to ask

  • Woolworths vs Coles: which  do you prefer?

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31 Aug, 2022-7 Sept, 2022

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  • Maky
    ·2022-08-31
    Whether prefer Woolworths vs Coles is not important. To me, what’s important is consumers will benefit from their price cuts and offerings in this inflationary climate.
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  • highhand
    ·2022-08-31
    $Coles Group(COL.AU)$ !
    Just by comparing YTD, 1 and 5 Years, you see it performs better than Woolsworth!
    Can't be a fluke
    Must be the liquor sales that's making Coles jolly [Happy]
    @Venus_M coins
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    • ___ _
      thanks!  my hand ✋
      2022-08-31
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  • Success88
    ·2022-08-31
    I love $Coles Group(COL.AU)$. During my holiday in Melbourne. I love to shop there, went there everyday to get beer and stuff🍺😆 i still keep their recycle bag. When last day shopping back to sg
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  • Testingnickn
    ·2022-09-01
    $Coles Group(COL.AU)$ is a much better company than $WOOLWORTHS GROUP LTD(WOW.AU)$, Coles provide free delivery options that go beyond your first order,and better flexibility of flybuys (loyality pts)
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  • koolgal
    ·2022-09-01

    I am only loyal to the supermarket that gives me the best value for my money and scour through both Woolworths and Coles weekly catalogs to find their special offers.  However I tend to buy more from Woolworths as I get 10% off my biggest shop due to their loyalty Everyday Rewards Program.  Woolworths have just introduced Everyday Rewards Extra which gives another 10 % off.  So that 's 2 times 10% off in 1 month.  How good is that!

    @Tiger_AU  

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  • Brocco
    ·2022-09-01
    Depending who are you? If you are a consumer price war between supermarkets definitely good. But if you are investor then nope, as profit and stock prices will be affected. For now COL results better.
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  • Karatechop
    ·2022-09-01
    Wollies and Coles share would be 70/30 respectively. Woolies offer lot more variety of goods and prices are reasonable. My local Wollies store is much bigger than the Coles and there's ample supply.
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  • Cris0
    ·2022-09-01
    Financially WOW nearly flat profit vs COL 4.3% increase net profit. Definitely will prefer COL. But generally both is big supermarket and customer will swap easily to where is “cheaper” and “easy”
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  • StickyRice
    ·2022-09-01
    The big risk to the sector at the moment is what happens with the consumer & the inflation pressures in the system. Those are going to be really important to see how the supermarket stocks play out.
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  • LMSunshine
    ·2022-09-01
    Thanks @Tiger_AU for the detailed sharing,appreciate it loads🤗 Totally confirms my idea that both $WOOLWORTHS GROUP LTD(WOW.AU)$ & $Coles Group(COL.AU)$ aren’t good stocks to buy right now😅
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    • LMSunshine
      Sometimes I feel there’s too much hype to buy consumer defensives & banks during a bear market.Each bear market is different & for this one,the key factors are inflation,oil prices,supply chain issues
      2022-09-01
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    • LMSunshine
      & all these factors impact both supermarkets a lot.With minimal wage increasing,there’s additional cost.These are the reason I’m bearish & staying away😅
      2022-09-01
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  • Cory2
    ·2022-09-02
    Woolworths for shopping, although Coles seems to have better quality goods (especially fruit & veg). I don’t like how you’d see 2 for $5 & under the ticket it’s $2.50 ea? Coles long term stocks.
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  • Just Do It
    ·2022-09-03
    Woolworths my favourite in my opinion, as a consumer i would like something cheaper but it is not good for shareholders if I hold that particular stocks, so actually it is a dilemma sometimes. 😂
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  • Belong
    ·2022-09-03
    I ahop at coles because its the closest store, but I prefer woolies because i think they have a nicer shopping experience
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  • Khikho
    ·2022-08-31
    Coles和Woolworths属于必需消费品行业,该行业受过去两个月反弹的影响较小,必需消费品行业的表现明显优于其他行业。不过,两只股票近期均出现下跌。发生了什么事?$Coles Group(COL.AU)$$伍尔沃斯有限公司(WOW.AU)$
    @AliceSam @JoeLeong @Mr_sEveN__ @Seven8 [开心][开心][开心]
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    • AliceSam
      OK
      2022-08-31
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  • Ruiqing
    ·2022-09-01
    Coles物价每周几乎都在升
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  • 己所不欲
    ·2022-08-31
    In terms of loyalty schemes. Greater flexibility of Coles' flybuy allowing points spent on gift cards/other products, which is an option that isn't provided by Woolworths, makes Coles the winner here.
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  • StickyRice
    ·2022-09-01
    Woolworths expects food inflation to persist into FY23, which could continue to throw up headwinds for the share price. $WOOLWORTHS GROUP LTD(WOW.AU)$
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  • Investforget
    ·2022-09-01
    As a consumer, the cheapest supermarket is better but this means less profits which not good for investors @Tiger_AU
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  • Joker_Smile
    ·2022-09-01
    has to be $Coles Group(COL.AU)$ . Historical statistics have shown that. Take some time to read and digest and you know where I am coming from.

    Huat Ah! [Miser]

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  • JZ8
    ·2022-08-31
    I have more faith in $WOOLWORTHS GROUP LTD(WOW.AU)$ because it is 1 of the largest supermarket in AU.
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