SYDNEY, April 27, 2026, 03:05 AEST
Coles Group Ltd faces a key week on pricing, with investors eyeing its third-quarter sales update due May 1. The focus: can the grocer maintain sales volumes as suppliers push to pass on higher costs in fuel, packaging, and agriculture? Woolworths, Coles’ main competitor, is set to report its Q3 F26 numbers just a day earlier, April 30, giving investors an early look at how both are navigating cost pressures.
It’s a tough moment. Australians are tightening their belts as petrol prices spike, fueled by the Middle East war. For businesses, pushing through higher freight and fuel costs isn’t flying—household budgets have already been squeezed dry.
UBS analysts, including Shaun Cousins, are tracking Coles and Woolworths as suppliers push for price hikes—looking to see if the supermarkets push those costs onto customers, take the margin hit, or refuse the demands outright. That decision is under the microscope this time, with cost pressures likely to linger.
Coles has already hiked the price of a clear grocery staple. Last week, the supermarket lifted its home-brand milk tags: 1-litre fresh white milk now sits at A$1.85, up from A$1.65. The 2-litre carton moves to A$3.55 from A$3.20, and 3 litres now fetches A$5.15 instead of A$4.65. A Coles spokesman pointed to higher transport, logistics and packaging costs throughout the dairy supply chain as the reason for the move.
The company bumped up temporary payments to directly sourced dairy farmers by roughly 5 Australian cents a litre and rolled out a A$1 million relief fund. In a letter, Coles said farmers and suppliers were getting squeezed by rising fuel, fertiliser and packaging costs. Norco, the farmer-owned co-op, followed with its own 5-cent-per-litre farmgate milk hike kicking in from May.
Matt Dalgleish, director at Episode 3, told ABC that rising fuel and fertiliser costs are “flowing through the supply chain,” pushing up prices all the way to the checkout. He pointed out shoppers in regional Australia might get hit harder at the grocery store, thanks to longer transport routes. Ben Bennett, who leads Australian Dairy Farmers, argued that it’s not just milk — the industry needs “20 per cent” more across the entire dairy category, since so much milk ends up as cheese. ABC News
Coles kicked off with a patchy set of numbers. Group sales revenue climbed 2.5% to A$23.62 billion for the half ended Jan. 4, with supermarket sales up 3.6%. Liquor, though, slipped 3.2%. Net profit after significant items took an 11.3% hit, landing at A$511 million. Into the first seven weeks of the third quarter, supermarkets saw 3.7% growth, or 5.3% if you strip out tobacco. CEO Leah Weckert put it plainly: “value remains front of mind.”
The stakes here go beyond just sales. Discount-pricing lawsuits targeting Woolworths and Coles could help define where promotional tactics cross into misleading territory—one analysis flagged potential fines reaching into the hundreds of millions, with possible knock-on effects for how Australian retailers approach product sales.
Coles ended April 24 at A$23.06, gaining 1.0%, with 3.1 million shares changing hands. What shifts the stock from here probably has more to do with how straight management talks about inflation, supplier pressure, and the expense of holding prices down, rather than a single quarter’s sales print.
Investors will be combing through Friday’s finer points, zeroing in on whether price increases are spreading past dairy, if those everyday value deals continue to pull in shoppers, and exactly where the pain lands first — Coles, suppliers, or the customers themselves.
