Coles (31 October) and Woolworths (30 October) 1Q25 sales results are likely to reflect a small improvement in industry growth with a slight edge for Coles in terms of supermarket growth rate.  We forecast Coles comparable sales growth of 2.6% and Woolworths at 2.1%. The bigger debate is whether industry growth will improve further given supermarket volumes remain sluggish and whether the retailers face any limits on their ability to sustain profit margins as the ACCC Supermarket inquiry continues. We expect softer results from Coles and Woolworths’ other segments in 1Q25e.

We expect signs of slowing sales, which reflect weak volumes and decelerating inflation. For Coles, we forecast 3Q24e Supermarket comp sales growth of 4.3%. We estimate Woolworths Food comps to rise by 1.5% and for Endeavour Retail we forecast comp sales to increase by 0.7%. While the differential in growth rates will be of interest, the bigger concern for the retailers is the continued weakness in volumes. Inflation is set to slow from here and comp sales growth could be even weaker in 4Q24e, which is a challenge for the retailers given cost growth remains far higher.