MELBOURNE, May 11, 2026, 08:01 AEST
Coles Group Ltd. faces the ASX on Monday as investors look hard at one thing: whether robust supermarket sales can stick around if fuel, freight, and supplier costs push higher. Shares ended May 8 at A$21.63, slipping 0.8%.
Timing plays a key role here: Australia’s grocery sector is back in the inflation spotlight. The Reserve Bank of Australia last week hiked its inflation outlook, projecting headline inflation to top out near 5% as the global energy shock pushes fuel prices higher and drags on economic growth.
Coles reported a 4.0% lift in third-quarter supermarket sales to A$9.8 billion, numbers that suggest demand isn’t the issue — for now. eCommerce surged 24.8%, according to the company, but liquor sales slipped 3.9%. Chief Executive Leah Weckert called it “another strong sales result,” noting the group had to steer through supply-chain volatility.
Margins are coming under fresh pressure. Coles flagged that supermarket price inflation, stripping out tobacco, slipped to 0.8% for the quarter thanks to lower prices for fresh produce. Still, the company noted a jump in supplier cost-price requests lately, with fuel, freight, and packaging expenses also climbing in recent weeks.
Early Monday, 9News put out new analysis spelling out the impact for shoppers: with inflation at 7%, a Coles grocery basket would climb to A$74.58 from A$69.70. The report also quoted UNSW economist Timothy Neal, who noted Australia’s dependence on Middle Eastern fertiliser imports and pointed out urea prices are up more than 50% since the war started.
Competition remains tough. Woolworths Group, the bigger player, posted A$18.1 billion in sales for the quarter with Australian Food up roughly 6%. Still, the stock slipped—management flagged that local food earnings growth won’t hit the top of its target range and announced a price freeze on 300 staple items.
Johannes Faul, an analyst at Morningstar, pointed out that Coles’ supermarket sales growth slipped behind Woolworths in the latest quarter, flipping the dynamic after Coles’ earlier run of stronger numbers. Faul maintained his A$16.50 fair value call on Coles but flagged online as another trouble spot—fulfilment costs weigh on margins compared to in-store sales.
Pressure from farmers and food charities is mounting on the supermarket majors. Sam Miller, an economist at NSW Farmers, voiced concerns to ABC Rural about price hikes, saying the gains weren’t being “equitably and fairly” passed along. Coles, for its part, responded through a spokesperson, saying it tried to absorb costs when it could and highlighted recent price cuts on roughly 400 products as part of its autumn value campaign. ABC News
Coles faces a squeeze from both ends. Taking on more supplier and fuel expenses shields customers, yet hits margins. Push too many costs onto shoppers, and the risk is losing budget-focused buyers to Woolworths, Aldi, or local independents.
Pricing practices continue to cast a shadow. The ACCC’s legal battle with Woolworths is heading for a conclusion, according to ABC. Over at Coles, the watchdog’s separate action over alleged deceptive discounting is still pending a decision; Coles rejects claims it misled customers.
The ASX had yet to open for its usual session when this article went to press. Cash-market trading kicks off at 09:59:45 and wraps up at 16:00 in Sydney. That means Monday’s open will provide the first indication of whether investors are prioritizing Coles’ latest online and supermarket gains, or if the fresh wave of costs rippling through the grocery giant is taking center stage.
