But Coles said a rise in theft was having a sizeable impact on the business, with a 20 per cent annual increase in “total” stock loss, which includes products that have to be marked down and disposed of and stock that has been stolen.

Weckert said the vast majority of Coles customers did the right thing when shopping, but there had been an uptick in stock loss across the retail sector, with “elevated levels of organised retail crime” in recent months.

“We are seeing a lot more reports coming through from the stores where there is a loss incident which is quite large,” Weckert said in a call with journalists on Tuesday morning.

Coles has taken action to address the issue, including increasing security at high-risk stores.

Looking at consumer spending patterns, the retailer said young families and people under 34 were among those working hardest to reduce their spending. The company is now seeing signs that consumers are shifting from eating out to making meals at home.

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“Eating out, takeaway and coffees from the cafe are increasingly being seen as treats,” said Weckert.

MST Marquee analyst Craig Woolford said Coles showed strong sales trends in the June quarter, but rising stock losses have likely contributed to falling gross margins in the second half of 2023.

“This may account for more than half of the weakness, with increased discounting possibly the remainder,” he said.

Coles investors will receive a fully-franked final dividend of 30 cents a share, bringing the full-year payout to 66 cents per share, a 4.7 per cent increase on last year.

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