Australian shoppers will soon have access to a new range of products from UK retailer Sainsbury’s, after Coles inked a major deal with the UK icon.
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Under the three-year agreement, Coles will sell packaged food, health, beauty and household products from Sainsbury’s.
According to the Australian Financial Review, the deal is part of Coles’ plan to boost private label products to make up 40 per cent of all sales within the coming years.
As it stands, Coles’ Own Brand products make up 30 per cent of sales or $10 billion.
“We want to accelerate the introduction of innovative products to Coles Own Brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia,” Greg Davis, Coles chief executive – commercial and express said in a statement.
“This deal will free up resources for our own product development team so that they can drive further innovation and help us fulfil our strategy to make Coles an Own Brand Powerhouse.”
When will the Sainsbury’s products land in store?
The first products will be added to Coles’ Own Brand range in the first six months of 2020.
Sainsbury’s white label products generate $17.7 billion, or half of Sainsbury’s sales.
“We’re excited to bring Sainsbury’s fantastic products to Australia, offering Coles customers a range of high quality, innovative products that they won’t be able to find anywhere else,” said Michael Luck, director of business development at Sainsbury’s.
And according to Coles, it will also consider selling Coles’ Own Brand products in Sainsbury stores in the UK.
“Coles has been exporting Australian food for 20 years, selling Australian-grown meat, wine and other products across the Asian market – this partnership with Sainsbury’s has the potential for us to take even more Aussie food to international customers,” Davis said.
Coles has not provided details of which products will be coming to Australian stores.
Coles’ (ASX: COL) share price climbed 1.25 per cent on Monday after news of the deal broke.
It comes as Coles faces increased pressure from the likes of Amazon and German supermarket giant, Kaufland, which has announced plans to open at least 20 stores in Australia.
Amazon on Tuesday announced plans to launch its own supermarket brand.
“The reason Amazon needs to expand its physical footprint is an accelerated demand for grocery pickup service as opposed to delivery,” David Bishop, a partner with research firm Brick Meets Click told Bloomberg.
“Shoppers have a greater sense of control when they pick up their groceries at the store in a secure location rather than worrying about it being left at their house.”
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