Coles has announced a major plan to upgrade its online shopping capabilities, data systems and install new self-serve checkouts, as well as overhaul products in 40 per cent of its stores.
Coles CEO Steven Cain announced the $2.5 billion plan at an investor day on Thursday, with the company set to spend $1.1 billion this financial year and another $1.4 billion next financial year.
While Coles was bolstered by COVID-19 panic buying last year, it also lost 1.3 per cent of the market share due to having fewer local stores. Coles’ stores are centered largely in bigger shopping centres and CBD locations, rather than smaller neighbourhoods, where IGA and Woolworths tend to be.
However, he added that it has since improved to claim 26.7 per cent of market share, up from 26.6 per cent in the first quarter of this year.
Coles said its biggest success in the last 12 months has been the speed at which it has been able to tackle customer problems, eCommerce CEO Ben Hassings said. The next step is maintaining and growing on this, he said.
Coles will now double its investment in online systems, with Cain admitting that it had previously under-invested in its online business when it was part of Wesfarmers.
It will also roll out larger self-serve checkouts to help customers shopping with trolleys, and begin testing systems allowing shoppers to use their mobile phones to check out.
Additionally, the company is hoping to update 40 per cent of its stores with greater international food ranges tailored to local demographics by 2022-23.
“There’s a myriad [of] opportunities facing us. The market in Australia is very good for food and liquor. It’s growing, there’s plenty of opportunities, and we think we’ve got the assets to exploit some of them,” Cain said.
“It’s making sure you’re confident that you’ve got the right returns before you press the accelerator.
"What we’re saying today is we’re pressing the accelerator.”
Coles is already spending $150 million to build two automated online fulfilment facilities and is rolling out more drive-through click and collect centres.
“The cost of automation is significant, but so are the returns,” Cain said.