Coles is concerned about a 20% jump in theft or "shrinkage", as they call it in supermarket world.
👉 Background: Coles is the number two supermarket chain in Australia, just behind the big Woolworths. Over the past few years, Coles has managed maintain pretty strong levels of growth... thanks to steadily increasing the prices of food on its shelves.
👉 What happened: Now, Coles' new CEO has come out to release her first annual results. In some good news, Coles' annual profit jumped to nearly $1.1 billion... which is up nearly 5%. But investors were concerned about the jump in costs from higher wage bills thanks to new Award rates.
👉 What else: And most interestingly, a 20% jump in theft or "shrinkage", as they call it in supermarket world, was cause for major concern.
💡During times of economic pain, petty supermarket theft jumps rapidly. The thinking is that shoplifting is very low on the list of priorities for the police force, which is under-resourced.
💡And Australia isn't alone. The US has also faced major theft issues at retailers recently. In May, Target in the US warned that theft would cut $US500 million off its annual gross profit. And US and European supermarkets are facing similar issues too.
💡Coles is trying to fight back with more security guards and security tech... But it seems like this issue is a major concern for all retailers. And by extension, all investors.
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