Coles Outpaces Woolworths in Q1 Sales as Grocery Battle Intensifies in Australia

Australia’s supermarket giant Coles has posted a solid 4% rise in first-quarter sales to A$10.96 billion (US$7.12 billion), maintaining its lead over rival Woolworths. However, analysts warn the gap may be narrowing as Woolworths ramps up promotions and better aligns inventory with consumer demand.

Coles’ share price dropped nearly 2.9% to its lowest since August, while Woolworths’ stock rose about 3%, marking its strongest level since early September. The results, released just a day apart, provided investors with a clearer view of the ongoing battle for dominance in Australia’s highly competitive grocery sector.

A significant driver of Coles’ performance was its surge in e-commerce, where online supermarket sales jumped 27.9% during the quarter. Woolworths also saw strong online growth, with e-commerce sales climbing 13.2%. Both companies are capitalizing on Australia’s growing shift toward digital shopping amid changing consumer behaviors.

In response to a soft start earlier in the year, Woolworths has stepped up investment in stores, promotions, and pricing to attract shoppers. Analysts at Jefferies noted that Woolworths may have begun closing the performance gap with Coles late in the first quarter through stronger value strategies and improved inventory management.

Both retailers continue to face mounting pressure from global competitors like Aldi, Costco, and Amazon, which are aggressively expanding in Australia’s retail market. At Woolworths’ annual meeting, new CEO Amanda Bardwell expressed cautious optimism for the second quarter, traditionally a peak period due to festive shopping.

As Coles and Woolworths double down on promotions and digital investments, Australia’s grocery war shows no signs of slowing — setting the stage for an intense battle heading into the holiday season.