Coles’ long-term strategic blinkers
The AFR reported further details about Coles’ plan to increase private label brands to 40% of sales within five years. Outgoing Coles MD John Durkan said the grocer wants to be an “own brand powerhouse” by 2023. This just reinforces our prior comments that Coles is operating with long-term strategic blinkers. The initiative may push revenue up in the short-term, but over time it will punish local suppliers (destroying many), increase the business’s cost of operations, and progressively degrade the brand – all without materially enhancing the customer offer or making the business more competitive on price.