Add CategoryOn Tuesday morning, Coles’ chief executive Steven Cain announced his retirement from the food and grocery business. After five years at the helm, Cain will be handing over the reins to Coles’ chief of commercial and express Leah Weckert on 1 May. While Cain’s resignation came as a surprise, he told analysts on Tuesday that he had always intended for his role at Coles to be his last executive position. Approaching 60 years old, he had been waiting for the opportunity to retire for years.&
s. “I’m certainly looking forward to a break, and I’ll be cheering on from the sidelines,” Cain said. “I’ve got a few months left as CEO, and want to make sure to give Leah a really smooth transition into [the role]. We’re in great shape with all of our projects, and they’re all at a fairly advanced stage. Leah sat beside me the day we signed Witron, she sat beside me the day we signed Ocado, and I don’t think there’s anything I know about those projects that she doesn’t know.” Weckert, who worked at Coles for the past 12 years across multiple portfolios, said she is honoured to be the business’ first female CEO. “Coles has a really exciting future ahead as we continue to execute [our] strategy, and I’m looking forward to working with the team [and] board members,” Weckert said. Coles’ chairperson James Graham welcomed Weckert’s appointment, and said that Cain had done an “outstanding” job through multiple tumultuous years at the helm. He led Coles through its demerger with Wesfarmers and into its life as a public company, and navigated the Covid-19 pandemic, and the aftershocks that continue to impact the industry. Smarter Selling sets strong standards Much of Cain’s success at Coles has come from a focus on improving the business’ supply chain technology, as well as the focus on its ‘Smarter Selling’ program, which is expected to bring about $1 billion in savings by the four-year program’s end in June, with the next iteration currently under discussion internally. Queensland University of Technology’s Professor Gary Mortimer said Coles’ focus on cutting costs and improving margin was indeed ‘smart’, and is now making a significant difference to the business’ balance sheet. “Coles’ sales were reasonably good, [and it] had very positive results in EBIT and net profit,” Mortimer told Inside Retail. “If you compare that to Best & Less’ numbers that came out [on Tuesday], it had good sales [up 13 per cent] but awful profit numbers [down 33 per cent] – it’s like a tale of two cities.” Additionally, with the ongoing effects of the Covid-19 pandemic and subsequent cost-of-living crisis, the business’ campaign to freeze the price of 1500 of its products, and drop the price of a further 500, has helped keep Australians onside at a time of historically high grocery prices. “I think consumers are responding really well to that strategy,” Mortimer told Inside Retail. “Customers understand that retailers are facing the same inflationary pressures as households, and I think the ability to walk into a supermarket and know that the price you pay this week will be the same until April or May. Shoppers are looking for price consistency.” Part of that strategy is Coles’ large investment in its own-brand products, which have jumped to over 6000 SKUs, and now make up around a third of the business’ total revenue. Cain noted that Coles didn’t yet have as wide a range as some of its competitors, but it has kept its ranges ‘tight but tailored’ in order to maximise efficiency. “We have some significant ambitions on the private-label front, and where possible we’ve tried to sign up to longer-term contracts that provide us with a great cost, [while also being] ethically sourced,” Cain said. According to Swinburne University’s professor of marketing Jessica Pallant, customers are currently being pulled in two different directions – wanting things made more sustainably and ethically, and wanting things cheaper. “Consumers are becoming more price sensitive, wanting to maximise value and stretch their budgets as far as possible,” Pallant told Inside Retail. “Interestingly though, this can sometimes be a tension between other motivations we’re seeing from consumers. For example, trends in wellness and sustainability: oftentimes these products are at a premium. “It will be interesting to see how Coles goes with their commitment to fully recyclable, reusable or compostable packaging for its own branded products, as this will likely appeal to consumers who are wrestling with these competing goals.”