UBS analyst Shaun Cousins assessed the supermarket chain’s like-for-like sales growth as “slightly below market,” while E&P Capital retail analyst Phillip Kimber said Coles’ results had missed expectations.

MST Marquee senior research analyst Craig Woolford said Coles’ sales growth “slowed more markedly” than revenue at its larger competitor,Woolworths.

“We expect small downgrades to earnings given the weaker trends are likely to continue,” he wrote in a note.

In-store Liquorland sales revenue growth was reasonably steady at 1.8 per cent,but it was a different story online,where people are increasingly buying food and drinks:e-commerce liquor sales soared 32.2 per cent,accompanied by a 24.6 per cent growth in online grocery shopping.

“There[is] a cohort of customers that use online shopping to manage to a budget. It prevents them from buying things impulsively when they go in store,” Weckert said.

Champagne and spirits will continue to be stocked on shelves. The supermarket expects customers will buy these as gifts for the festive season.

In-store collectible campaigns,such asMasterChef cookware and the current eight-piece Curtis Stone barbeque collection,are part of Coles’ plans to keep customers coming through its doors.

“Those campaigns have been very successful in driving sales. They’re a key part of the trade plan going forward,” Weckert said.

Like Woolworths,Coles’ fresh fruit and vegetable prices softened,declining 14.5 per cent compared with the same period last year,during which colder weather and La Nina flooding severely affected growing conditions.

However,overall food inflation – excluding tobacco and fresh produce – rose to 5.7 per cent as prices for dairy products such as cheese,eggs and oil remain elevated,affected by high farmgate milk prices. The prices of bakery items have been impacted by higher wheat commodity prices.

Coles is alsocontending with rising theft,and is implementing stock-loss technology at 250 of its most affected stores by the end of the year,such as cameras that can determine if items have skipped the scanner and “smart gates” that lock the wheels of trolleys if someone tries to leave without paying.

Weckert said the supermarket would have more details to share on stock loss in coming months.

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