We have pulled together a chart pack of market share across retail segments. The key insights we draw from it are:

• Major supermarket chains both taking share, which is rare: Coles and Woolworths combined market share rose 60bps in FY26. Typically market share is flat. Tobacco headwind has hurt independent supermarkets and Aldi has been more focused on profitability. The majors share gains likely to be smaller in FY27e.
• Online driving share gains: Online industry sales growth of 14% in FY26 and ASX-listed retailers delivered 17%. Large retailers are leveraging their traffic to grow marketplace sales.
• Value focused offerings winning over premium: In both department stores and apparel retailing, consumers gravitated to value focused offerings. In clothing, Uniqlo and Glassons have taken share 35bps of share collectively, whilst Kmart has taken 58bps of share while David Jones and Myer together lost 43bps.
• Less reliable ABS data: Our work on market share is designed to provide insight about market structure and the relative performance. ABS retail sales data releases have become less transparent and the data source is less reliable. We have combined datasets where possible to provide the most accurate view on market share.

Sigma only has 18 months of history as a merged business and therefore an understanding of its earnings drivers is still emerging. While the growth prospects for Chemist Warehouse domestically and internationally are strong, Sigma is ultimately a wholesaler and franchisor. Modest leverage from converting revenue growth into EBIT growth is a function of its revenue mix. Close to 40% of Australian revenue is PBS prescriptions, where margins are thin. We expect revenue growth of 8% to 16% p.a and operating leverage of 1.0-1.3x over the next three years. This translates to EPS growth CAGR of 15.8% over three years but puts a greater emphasis on revenue to drive EPS.

Sigma reported FY26 EBIT sales up 16% and EBIT up 21% on a normalised basis. Sales trends were slightly slower in 2H26 and we expect 10% to 11% Australian like-for-like (LFL) sales growth in FY27e. For a company with double-digit sales growth, operating leverage is low. Sigma had 43bp of EBIT margin expansion in FY26, with lower gross margins partially offsetting fixed cost leverage. We forecast 43bp of margin expansion again in FY27e. We expect a bigger contribution from International earnings with faster store openings. International EBIT could double in two years.

Chemist Warehouse has sustained double-digit comparable sales growth for three consecutive years. The retailer has won market share from other pharmacies and Coles and Woolworths. Chemist Warehouse advantages are its pricing tactics and breadth of range. While Coles and Woolworths are unlikely to fix their ranging issue, they may adjust pricing tactics. Chemist Warehouse is cheaper than the supermarkets when comparing shelf prices to Chemist Warehouse’ standard price, but much less so when comparing promotional prices. The risk to Chemist Warehouse is that Coles and Woolworths use everyday low pricing tactics to improve their relative pricing to Chemist Warehouse. They have begun lowering prices on high profile products and more will come over the next 12 months. We may see a slowdown in Chemist Warehouse sales growth towards single digits over the next year.

A2 Milk’s recent update suggests that its product shortages in China have been resolved. The financial pain was a -$53 million hit to FY26e sales and -$33 million hit to EBITDA. Given A2 Milk’s disclosure, it appears the loss on China label sales was over $100 million, with half of the customers lost to competitors and half switching to A2 Milk English label. Re-capturing lost customers will take time and keeps us cautious on any sales recovery. On margins we are more optimistic about FY27e as Pokeno losses unwind and the supply chain has more inventory buffers.

Coles confirmed it is assessing the merits of an acquisition of Greencross, the parent company of Petbarn and Greencross Vets, owned by TPG and super funds. The press speculation of a $4 billion acquisition price is full. Coles could debt fund such an acquisition. It will be EPS accretive, but the real question is whether it is value accretive. We worry about the future growth of the pet industry given its COVID-19 boom. The market is also potentially saturated with stores and migrating online. Any acquisition price above $4 billion would concern us.

Woolworths is undertaking a program called Customer Offer Reset (COR), which will reduce its branded range and shift more products to an every day low pricing (EDLP) proposition called Lower Shelf Price (LSP). The program will show up on shelf shortly and impact the next two years. COR and LSP should be positive for sales and earnings, but it does depend on the competitor response. These programs demonstrate a sharper focus by Woolworths on execution and price trust. While not solely related to COR and LSP, we expect Woolworths to sustain above market (and Coles) growth over the next year and EBIT margin expansion.

Sigma’s trading update revealed a small, but notable improvement in sales trends and an entry into the UK through a joint venture. Improved sales trends are a positive sign but the driver still appears to be GLP-1 drugs, resulting in margin dilution. The UK joint venture is small with five stores to be trialled in the Chemist Warehouse format in London.

Endeavour Group’s 3Q26 trading update revealed slower sales trends with an enticement of $100 million in cost savings in FY27e as a benefit. The reality is that sales trends are insufficient for cost savings to drop through to earnings. We expect Endeavour to continue gaining market share given First Choice could close, but a recovery in market growth is more important in our view, which may take time as retail liquor reverts to slight per capita volume declines.

Coles reported 3Q26 sales growth of 3.1%. While 3Q26 sales lagged its rival, Coles Supermarket track-record has been superior to rivals and the market over the past three years. Its Supermarket growth rate is likely to converge with Woolworths over the next nine months in our view. In Liquor, Coles rebranding has not delivered any earnings improvement and former First Choice stores could be shut down in our view. Coles looks to have enough flexibility to manage the fuel price and inflationary pressures near-term. The more important debate will be the ability of the two major supermarkets to ensure ongoing healthy rates of sales growth, which should occur as food inflation accelerates over the next year.