The three areas in which Coles is outperforming Woolworths is sales growth, gross margins and share price performance. 

Sales Growth: Coles’ sales have been growing faster than Woolworths’. Over the six months ending June 30, 2024, Coles’ sales rose by 2.6% compared to Woolworths’ 1.2%. Coles has focused on keeping shelves stocked and presenting itself as a better value option, which has resonated with price-conscious shoppers. 

Narrowing Margins: Coles has been more effective in managing theft and stock loss (with surveillance technology such as ‘skip scan’, boosting its gross margins. Investments in new distribution centres, such as the Redbank facility, have also helped improve product availability and profitability. 

Share Price Performance: Coles’ share price has risen nearly 20% over the past year, while Woolworths’ has fallen by 5.4%. Analysts expect Woolworths’ stock to drop further due to sluggish sales, while Coles is predicted to continue performing well despite potential regulatory risks. 

These three factors have helped Coles gain ground over Woolworths, signaling a shift in customer perception and financial performance. 

SOURCE: LaFrenz, Carrie. “These Three Charts Show How Coles Is Outperforming Woolworths.” The Australian Financial Review, September 3, 2024. https://www.afr.com/.