Coles Shares Leap 8.6% as Rate Cuts Spur Stronger Grocery Sales

Coles Group shares surged as much as 8.6% on Tuesday, the steepest intraday rise in five years, after Australia’s second-largest grocer reported resilient full-year results and said recent interest-rate cuts were encouraging shoppers to loosen their purse strings. The rally made Coles the top performer on the ASX 200, which was trading lower on the day. Underlying profit for the year ended 30 June slipped 2.4% to A$1.18 billion, yet came in ahead of the Visible Alpha consensus of A$1.11 billion. Statutory net profit was A$1.08 billion. The company declared an unchanged final dividend of 32 Australian cents a share, bringing the full-year payout to 64 cents. Coles said supermarket sales rose 4.3% for the year and accelerated to 4.8% in the June quarter. Growth has edged higher to 4.9% in the first eight weeks of fiscal 2026, which management attributed to the Reserve Bank of Australia’s rate cuts that began in February and improved consumer sentiment toward in-home entertainment and grocery spending. While alcohol and tobacco revenue continued to shrink—tobacco sales fell 30% amid higher excise taxes and a rise in illicit trade—analysts welcomed signs that stronger grocery volumes could begin to flow through to earnings leverage. Chief Executive Officer Leah Weckert said the early uptick represented “green shoots” in household confidence. Investors will next look to rival Woolworths, which reports annual earnings on Wednesday, for further insight into whether easing monetary policy is translating into a broader recovery in Australia’s closely watched supermarket sector.