Coles Supermarkets

Coles Supermarkets Australia
Pty Ltd

Type	Subsidiary
Industry	Retail
Founded	1914
Headquarters	Hawthorn East, Victoria, Australia
Number of locations	741 (including 17 BI-LO Supermarkets)
Key people	John Durkan Managing Director
Revenue	A$32.07 billion (2011)
Operating income	A$1.17 billion (2011)
Total assets	A$19.08 billion
Number of employees	100,000+
Parent	Wesfarmers
Website	Coles.com.au

Coles Supermarkets, commonly known as Coles, is an Australian supermarket chain owned by Wesfarmers. Founded in 1914 in Victoria, Coles operates 741 stores throughout Australia, including 17 BI-LO Supermarkets. Coles employs over 100,000 employees and, together with rival Woolworths, accounts for 80 per cent of the Australian supermarket market.

History

George James (G. J.) Coles learned the retail trade working for his father's 'Coles Store' business from 1910 to 1913. (The store continued operating as "The Original Coles" at Wilmot, Tasmania until it was destroyed by a fire on 24 January 2014.) Coles itself was founded when G. J. Coles opened the 'Coles Variety Store' on 9 April 1914 on Smith Street in the Melbourne, Victoria suburb of Collingwood. Further expansion occurred and Coles' interest in food retailing was spurred in 1958 when it acquired 54 John Connell Dickins grocery stores. It then acquired the Beilby's chain in South Australia in 1959 and 265 Matthews Thompson grocery stores in New South Wales in 1960.

An entrance to a Coles supermarket in Dee Why, New South Wales.

Inside a Coles supermarket in Berwick, Victoria.

An aisle in a Coles supermarket in Glenfield Park.

In 1960, the first supermarket was opened in the Melbourne suburb Balwyn North, at the corner of Burke and Doncaster Roads where a modernised version continues to operate. By 1973, Coles had established stores in all Australian capital cities. From 1962, its supermarkets were branded Coles New World with accompanying rocket imagery. In 1991, the stores were rebranded Coles Supermarkets and from 1998, simply as Coles.

From mid 2006, many BI-LO supermarkets were badged as Coles Supermarkets. Newmart supermarkets, under which BI-LO traded in Western Australia, were badged as Coles Supermarkets in 2002-2003. Newmart stores co-located with Coles in the same area or shopping centre were sold to Foodland and re branded as the now-defunct Action Supermarkets chain. The conversion program was put on hold at Easter 2007. On 2 July 2007, Western Australian based company Wesfarmers agreed to purchase Coles Group Limited for A$22 billion. The purchase was completed in early 2008.

In August 2007, as Wesfarmers foreshadowed its plans for the restructuring of Coles Group following its anticipated takeover, it stated that one of three planned divisions would comprise supermarkets, liquor and convenience stores.

In February 2008, Wesfarmers appointed UK retailer Ian McLeod as managing director of Coles Supermarkets plus liquor, fuel and convenience businesses. McLeod's previously headed UK car parts and cycle retailer Halfords and gained supermarket experience with Asda and Wal-Mart. In 2008, the I Test For Coles Panel (or Coles Mums' Panel) began, with 2,500 panelists testing Coles brand products in their home and providing general feedback about Coles.

In February 2011, Coles acquired National Australia Bank's 50 per cent interest in Australia's largest loyalty program FlyBuys, giving it 100% ownership. In September 2011, Coles commenced stocking private label clothing in their stores with several stores receiving refits to accommodate the range.

Accusations of anti-competitive practices

Coles has also been accused by suppliers of using heavy-handed tactics when dealing with its suppliers. An investigation in 2004 by the Australian Competition and Consumer Commission did not result in any action being brought against Coles and Woolworths. A 2012 investigation where suppliers were offered anonymity is believed to have uncovered unethical practices. In 2013, the ACCC was investigating both Coles and Woolworths over accusations that they used improper market practices to force down prices from suppliers.

Coles signed a controversial ten-year agreement in early April 2013 with the Murray Goulburn dairy co-operative, whereby farmers will supply 200 million litres of milk annually for the supermarket chain's private label milk brands in return for premium prices. The co-operative announced that it would invest AU$120 million to construct two new dairy processing plants in New South Wales and Victoria to fulfil the deal. Coles seeks to receive a 10 per cent discount on the cost associated with its former milk supplier Lion.

Despite Coles refuting allegations of bullying behaviour, in May 2013 CEO Ian McLeod accused multinational manufacturers of making excess profits in Australia, arguing that equivalent pack sizes of Coke, toothpaste and other consumer products could be purchased in Asia for up to 60% lower than in Australia. Despite making excess profit, McLeod also argues that Australian manufacturers are inefficient. McLeod provided no evidence for either claim except a simple comparison of shelf prices.

Advertising and branding

Coles original slogan was "nothing over 2/6", when it was primarily operating variety stores. The slogan "You'll find the best value is at Coles New World" was used in the 1980s. The red/orange orb was used from 1991 to 2005. "Serving you better" was used as a slogan from 1998 to 2003, replaced by "save everyday", endorsed by actress Lisa McCune. A circled tick was used as a logo device from 2003 to 2007, replacing the orb as a primary device in 2005. "Save everyday" was later changed to the grammatically-correct "save every day".

In 2007, that slogan and circle tick were discontinued with simply the Coles name used in preparation for a new red ball logo to match proposed Coles Group livery, which was shelved later in the year as the business was sold. A number of tag lines were employed in the next few years: "Something better every day", "Proudly Australian since 1914" (introduced with its TV sponsorship of the 2008 Summer Olympics), "Cutting the cost of your shopping" and "It all counts". Its current slogan is "Quality food costs less at Coles".

In the 1960s, Coles sponsored a general knowledge quiz show, Coles £3000 Question (later Coles $6000 Question and Coles $7000 Question) which aired on Channel 7.

In 2010, Coles launched a new sub-slogan, "Down Down, Prices Are Down", featuring a large red cartoon hand pointing downwards to symbolise the chain's low price policy. The slogan incorporates the tune of "Down Down", a 1975 hit by British rockers Status Quo. In 2011, the campaign was revised to the fit the tune of Petula Clark's 1964 hit "Downtown". but reverted to "Down Down" later in the year. In 2012, it used Status Quo, which originally recorded the song in 1975, singing and speaking in the newest ad in the series.

In 2012, Coles released another sub-slogan, "There's No Freshness Like Coles Freshness", to complement the freshness of their fruits and vegetables. In response to the price cuts that were central to the 2012 campaign, rival supermarket corporation Woolworths accused Coles of misleading consumers due to a claim that the discounts were not new and are part of the daily business of supermarkets. Woolworths chief executive Grant O'Brien explained, "It's a promotion that happens every day of the week in retail land. To say it's a huge reduction and a market changing or game changing is in a way to mislead."

Notable promotions

• 4 cents-per-litre fuel offer: When a customer spends $30 or more in a single transaction at a Coles, BI-LO, Pick'n'Pay or Liquorland, they receive a 4 cent discount coupon on their receipt for use at Coles Express service stations. This practice has been criticised by competition law experts who argue that people pay higher petrol and grocery prices to fund these discounts.

• Shoppers can collect flybuys loyalty program points at Coles Group businesses.

• Between 1991 and 1993, Coles Supermarkets ran a promotion in conjunction with Apple Computer and 12 major suppliers entitled "Apples for Students", where students collected grocery dockets and returned them to their participating school, and once a certain value had been reached the school would be provided with a free Macintosh computer. 70% of Australia's schools and kindergartens participated and gained more than 25,000 computers, equipment and software worth $13.6 million.

• In 2010, Coles Supermarkets ran a program called "Sports for Schools" which customers collected coupons to hand in to their school in exchange for sports equipment. The program was run again in 2011 and in 2012.

Private label brands

Coles has five levels of generic or private label brands.

• Coles: A mid-price line, replacing the 'You'll love Coles' brand. Designed to match established branded products.

• Coles Smart Buy: A budget label covering household essentials and groceries. Easily recognizable due to its plain white and red accented packaging.

Coles Smartbuy Salt

• Coles Finest: A premium brand, with a small range of gourmet foods. Promoted as of greater quality than many well known branded products and often more expensive.

• Coles Green Choice: A range of household products which claim to be environmentally responsible, with a donation being made to Clean Up Australia with every one of its products sold.

• Coles Organic: A range of products grown and processed without the use of synthetic chemicals, fertilizers, pesticides or herbicides, approved by official certified organisations.

• Coles Simply Less: A range of products designed for health conscious customers. Usually have lower fat, salt, or sugar levels than traditional products or are designed as a health products such as the Simply Less range of meal replacement shakes.

• Coles Simply Gluten Free: A range of around 40 products designed for customers who are gluten intolerant or on a gluten free diet for other reasons.

• Mix Clothing: A range of budget essential clothing; Mostly women's and children's clothing.

See also

• Coles Group
• Coles Online
• Wesfarmers
• Coles Express
• BI-LO
• Liquorland
• List of supermarket chains in Oceania
• Pick 'n Pay Hypermarket

External links

• Official website