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.

Amazon’s Australian 2025 results show an even larger increase in sales for last calendar year. We estimate its gross transaction value was $9.1 billion, an increase of 31%. Amazon accounted for over one-fifth of the non-food industry’s growth last year. Put differently, it detracts about one percentage point of growth from the rest of the non-food retail industry. Amazon continues to lift marketing spend and Prime subscriber numbers too. Amazon is a classic long-term structural challenge for retail, not an overnight disruption. It is likely to continue at its current pace for at least another three years given its supply chain capacity. The threat to incumbent retailers will remain a gradual squeeze, not a crush of profit margins.

Sigma reported 1H26 normalised revenue growth of 15% and EBIT growth of 19%. The sales result was strong but the modest operating leverage is a reminder of the inherently low gross margins in the business. Sales trends are strong but likely to slow from here. We expect LFL to remain double-digit in 2H26e, but then slip into single-digit territory for FY27e as the company laps higher growth and price inflation fades. Going forward, each 1% sales growth to translate into approximately 1.5% EBIT growth. Synergies will continue to help earnings over the next four years.

Harvey Norman reported 15% EBITDA growth in 1H26. Sales growth was solid in both the key markets of Australia and New Zealand and profit margins expanded with better cost control. Harvey Norman’s sales trends are likely to slow in Australia and NZ over the next 12 months, but we expect it to be a mild slowdown. The improved inventory position for franchisees bodes well for margin expansion in 2H26e.

We have published our periodical chart pack of retailer performance vs market. See attached PDF.  This market share report provides two insights – 1) which retailers are winning and to what extent. 2) Insights about market structure.  If you would like any of the data in Excel at any point, just contact us.