Endeavour reported group sales growth of 2.1% in 1Q24. The underlying trends were similar for both the Retail and Hotels division and we expect growth to remain near this rate over the remainder of FY24e. In Retail, the company’s revenue growth is catching up to market growth, but industry-wide volumes are in decline. In Hotels, the company is stepping back from acquisitions, focusing more on renewals and redevelopments.

Woolworths 1Q24 sales revealed good growth in its Australian Food division but weak results in NZ and Big W. Woolworths Food division is the driver of group earnings and valuation and is likely to see a further moderation in sales trends over the next year. There is a risk that the positive mix effect on sales unwinds as consumers react to higher prices and income growth is squeezed.

Coles reported 1Q24 sales growth of 4.7% from its Supermarket division and 1.8% for Liquor. While Coles results were weaker than Woolworths, underlying trends remain quite similar and the growth gap is likely to remain small. The challenge for Coles is that sales growth is likely to be below underlying cost growth, putting an emphasis on cost savings to protect margins.