Which supermarket is winning the retail war?
As Australians stockpile groceries and supplies in the event of being quarantined, which of the two leading supermarkets are winning the war?
Since the start of 2020, Coles returned 5.3% versus returns of 3.7% by rival Woolworths.
Coles also beat Woolworths over the year to 4 March, 2020, with a 12-month return of 40% versus 30% for Woolworths.
The firms were both hit by “toilet paper gate” as customers stockpiled toilet paper last week. Woolworths was reported to have run out, rationing stock per customer, which was a positive for Coles and both firms consulted with Prime Minister Scott Morrison on how to improve availability.
Both of these companies had beaten the ASX 200 which lost 4.6% since the start of the year.
However, they have both also come under fire for an underpayment scandal. Coles admitted underpaying staff at least $20 million over the last six years but this was dwarfed by the $300 million underpayments at Woolworths.
Coles, which was founded in 1914, was held in the top 10 of at least 15 funds such as EQT Flagship, Fidelity Australian Equities and Lazard Select Australian Equity, according FE Analytics.
The firm was previously owned by Wesfarmers from 2007 but listed on the ASX as Coles Group in November, 2018.
In its latest results for the six months ended 5 January, 2020, Coles said revenue increased by 3.3% over the period to $18.8 billion and it expected a $20 million hit to group earnings from the underpayment scandal.
Meanwhile, Woolworths was held in the top 10 of more than 60 funds including AMP Capital Equity, Schroder Australian Equity and Legg Mason Martin Currie Core Equity.
For Woolworths, the company reported $32.4 billion in revenue for the six months to 31 December, 2019, but was hit with one-off costs of $131 million, including $80 million provision for worker remediation after an underpayment scandal.
Share price of Coles and Woolworths from 31 December, 2019 to 4 March, 2020
AUTHOR
Laura Dew
Recommended for you
Retailisation of private markets such as evergreen funds may seem like appealing options for wholesale and retail investors, but providers risk undermining trust if their products are unclear.
Ethical investment manager Australian Ethical has seen its funds under management rise by a third over FY25 to close out the year at $13.9 billion.
BlackRock Australia’s head of intermediary distribution James Waterworth has taken up a new distribution role at an alternative asset manager, while Antipodes has hired a distribution director.
BlackRock’s iShares ETFs have reported a record first half for inflows, gaining US$192 billion in the past six months, to see overall ETF assets under management rise to US$4.7 trillion as it launches its first active ETF in Australia.
