Coles stores to grow bigger

May 30, 2012
AAP

Coles plans to increase the size of its supermarkets as it continues its battle with Woolworths.

Managing director Ian McLeod told investors on Wednesday the supermarket giant wants to increase its floor space by two per cent each year.

Coles expects to open 19 new stores, close 11 stores, and extend 10 stores in the 2011/12 financial year.

Up to 400 stores are also set to be refurbished.

“For us, the optimum store size is 3,000 square metres,” Mr McLeod told investors in Wesfarmers, which owns Coles.

City Index analyst Peter Esho said the comments indicate Coles will continue to work on gaining market share.

“This sends a signal to Woolworths that the recent price war is unlikely to bed down anytime soon,” he said.

Wesfarmers also owns Bunnings, which Woolworths is trying to compete with by opening up the Masters hardware chain.

Bunnings had 202 warehouse stores as of May, and planned to open another 18 in 2012/13, investors were told on Wednesday.
Its longer-term plan is to open 10 to 14 stores each year.

“This business is far from maturity and, again, sends a strong message to Woolworths that its Masters concept has a lot of catching up to do,” Mr Esho said.

Woolworths opened the first 10 Masters stores in the nine months to the end of March.