Vegetable, meat prices fall as Coles shoppers buy cheap home brands

Sales of Coles’ budget home-brand products have spiked over the past three months as shoppers look for bargains, but the supermarket giant says inflation is moderating and the price of some key products is starting to drop.

Coles confirmed in an update to the ASX that inflation is moderating across its stores compared to the previous quarter. Price inflation hit 6.2 per cent for the three months to the end of March, compared with 7.7 per cent for the second quarter.

The company said there was some deflation among certain products.

“The largest drivers of the moderation were in fresh produce, with some key lines in deflation, including lettuce, cucumbers and carrots and in the meat, deli and seafood category,” the group said.

Coles reported a 7 per cent jump in third quarter supermarket sales on Friday, hitting $8.6 billion, while liquor sales were 2.6 per cent stronger to $801 million.

The company said its promotional offers and own brand products helped power the results, with an 11.4 per cent jump in own-brand sales revenue.

Exclusive to Coles brands delivered $2.9 billion in sales for the quarter and the company launched 227 own-brand products onto shelves over the past three months.

In his last quarterly update for the business before his retirement, Coles boss Steven Cain said the group’s budget focus had helped drive sales volumes during the quarter.