Coles shrugs off discounting scandal to post $1.1bn profit

Supermarket giant Coles has unveiled a massive profit boost just months after it was taken to task for its role in misleading discounting.

In the wake of Coles being smacked by the ACCC for its “Down Down” campaign, the supermarket unveiled a surge in net profits to $1.1bn.

But net profits would have come in at $1.26bn, if it wasn’t due to a $235m significant expense due to a Fair Work case, meaning profits minus one of costs came in 13 per cent higher.

In the Fair Work case, Coles and its major rival Woolworths were found to have historically underpaid nearly 30,000 employees due to errors in their award arrangements.

Months later in May 2026, the Federal Court found Coles made false or misleading representations about its discounting.

The ACCC alleged Coles temporarily increased the price of each product by at least 15 per cent for a relatively short period of time, before placing it on a ‘Down Down’ promotion at a price that was still higher than, or the same as, the price it had previously sold for before the price increase.

Coles instead attributed the rising sales to the expansion of its ‘everyday value’ and ‘exclusive to Coles’ ranges, increased Flybuys activity, and a significant uplift in customer satisfaction.

Coles Group managing director and chief executive Leah Weckert said Tuesday’s results were particularly pleasing given the current cost-of-living pressures on households.

“Despite these pressures, we strengthened our competitive position, gaining market share in supermarkets and building momentum across our digital business, and we enter FY27 with good momentum and a strong balance sheet,” she said.

Ms Weckert said the business’ next phase would include new store openings, increasing use of its renewal program, and improving its liquor division.

In preliminary reporting to the market, Coles announced revenues of nearly $45.6bn between June 30, 2025 and June 28, 2026.

The supermarket giant finished with net profits from after taxes of $1.1bn.

Its liquor division once again took a hit as sales fell 3.3 per cent to $3.55bn.

Originally published as Coles shrugs off discounting scandal to post $1.1bn profit