SYDNEY, June 8, 2026, 02:03 (AEST)
Coles Group finished Friday at A$22.21, up 1.9%, ahead of the King’s Birthday holiday. The ASX cash market is closed Monday for the public holiday, so no settlement will occur until trading starts again.
Grocery stocks face pressure from both steady demand and squeezed household budgets. Australia’s GDP rose just 0.3% in the March quarter, signaling weak growth in the economy. Moody’s Analytics’ Sunny Nguyen told Reuters “the headline was soft.” Stephen Smith, a partner at Deloitte Access Economics, said the “quality of growth has deteriorated.” Reuters
Higher costs are back in focus. The Fair Work Commission in Australia will raise minimum wages by 4.75% starting July 1. Citi analysts, cited by Reuters, said the move puts more cost strain on businesses, along with pressures from the Middle East conflict. That’s a real hit for supermarkets with a big wage bill.
Coles managed to outperform last week. Shares were up roughly 2.3% from the prior Friday finish at A$21.72. The stock gained 1.88% on Friday, trading around 3.48 million shares.
S&P/ASX 200 slipped 0.70% to 8,625.10 on Friday, taking its weekly loss to around 1.2%. The broader market offered little support. Numbers are based on Friday-to-Friday closes.
Investors are still watching Coles’ last trading update. On May 1, the company said third-quarter supermarket sales rose 4.0% to A$9.78 billion and comparable sales gained 3.6%. CEO Leah Weckert said “value and availability will be important” soon. Coles also pointed to weaker liquor sales and rising supplier, fuel, freight and packaging costs.
Peers sent a mixed defensive read. Woolworths Group ended Friday at A$35.69, up 1.22%. The stock rose 1.31% for the week. Metcash, which supplies IGA and other chains, was at A$3.04 on Friday, up 0.33%.
Competitive pressure is still an issue. Morningstar’s Johannes Faul said Coles has a “difficult-to-replicate store network,” but pointed out that Woolworths can copy some of Coles’ strategies. He also warned that online grocery sales can squeeze food margins, so stronger sales won’t always boost profit. Morningstar
The risk is pretty clear. If Coles faces wage, freight and supplier costs jumping faster than it can claw back with higher shelf prices or better efficiency, margins could get squeezed. That could hit just as more shoppers look for promos and swap to cheaper own-label products.
Offshore sentiment could weigh on Tuesday’s reopen. Wall Street tumbled on Friday, with the S&P 500 dropping 2.64% and the Nasdaq losing 4.18% after strong U.S. jobs numbers renewed worries about rates. “The dam just broke” following a long rally, Carson Group’s Ryan Detrick told Reuters. Reuters
Coles goes into the new week with Friday’s bid for defensive retail stocks still in focus, but investors are more interested in how the stock trades in a risk-off market. The big question is whether Coles stays above A$22 after the holiday. Woolworths has also shown some strength lately, and markets are looking to see if that cuts into the gap in value and momentum between the two.
Coles faces another test on trading execution, with supermarket sales, weaker liquor, and online growth in focus. Cost inflation is also on the radar, as the company weighs how much it can take on before shoppers push back at the checkout. Heading into Tuesday, the stock still has momentum, but macro conditions aren’t helping.
