Coles defends sustainability plans as it enters a “transformational year”


Coles chief executive Steven Cain told investors at the company’s annual general meeting on Wednesday that next year will be “one of the most transformational” in the supermarket’s 108-year history. Continued investment in logistics, as well as a pipeline of new stores, are set to drive growth for Coles, despite the ongoing impact a higher cost-of-living is having on its customers, and inflation is having on its suppliers.  “We’ve set out differentiators in our strategic plan, a

lan, and we continue to make good progress against all of them,” he said.

According to Cain, the retailer’s main differentiators are its own-brand products, which number around 6000 items, more than its competitors, and its Flybuys loyalty program, which touches around 20 per cent of all retail expenditure in Australia.

The loyalty program, which is jointly owned by Coles and Wesfarmers, is now available to shoppers at Bunnings and Officeworks, giving both businesses substantial data on their customers’ purchasing behaviour.

Given the range of data breaches that have occurred in the last month or so, investors were keen to understand how Coles is keeping customer data safe. 

Coles chairman James Graham explained that the supermarket’s customer data platform is independently reviewed by data experts each year in order to ensure it is up to scratch, and the business has been upping its investment in data security over the last several years.

“We are on constant red alert to the risks [of a data breach], and are constantly investing to ensure we can maintain the security of the data we have,” Graham explained.

At the meeting, Graham was successfully reelected, though he is expected to retire during his term. 

Sustainability aims questioned, defended

Of all the industries within retail, Australian supermarkets have arguably been leading the charge with investing in more sustainable and ethical solutions. In fact, one of Coles’ main goals is to become Australia’s most sustainable supermarket. 

However, questions were asked during the AGM about the business’ commitment to its environmental efforts. 

One investor asked Coles if it would back down from the sale of fruit and vegetables that are not covered in plastic, and if it had a Plan B in mind for “when it’s accepted that climate change caused by man is nowhere near the levels the renewables industry is claiming”.

Graham was clear in his answers.

“We don’t want to add to environmental issues, [and] we are very focused on sustainability, and living responsibly,” Graham said.

“What we’re hoping to do with all of our customers is to create a sense of trust in terms of the price, the quality, and the commitment to sustainability. If we balance all those items, we believe we’ll get more customers, and more support.”

Graham also backed the business’ aim to hit net zero emissions in the Coles business by 2050. It aims to be powered entirely by renewable energy by FY25, and to reduce its combined Scope 1 and 2 greenhouse gas emissions by more than 75 per cent by the end of FY30.

“We don’t make these commitments lightly, [and] we make them because we know the importance of them,” Graham said.

“We still have work to be done, and we will be measured by our stakeholders in terms of our achievements in time, but I’d have to say that our ‘Plan A’ is pretty robust.”

Whether the infrastructure exists for Coles and other retailers to meaningfully reduce their environmental footprints is less certain. 

Just this week, soft-plastic recycler Redcycle confirmed that it has indefinitely suspended its collection and recycling scheme due to challenges “exacerbated by the pandemic”. Its recycling partners are unable to keep up with demand. 

According to Redcycle, there has been a 350 per cent increase in the amount of soft plastic recycled since 2019. The company has bins in many major retailers, including Coles, where customers can drop off soft plastics, which can’t be recycled at the kerb. 

Environment minister Tanya Plibersek called the situation “unfortunate”, but said that ultimately the supermarket sector should be able to figure something out.

“It shouldn’t be beyond these big supermarkets to come up with a viable solution to allow Australians to continue to recycle,” she said, according to SMH. 

“I expect Coles and Woolworths to step up and indicate how they will deal with soft plastic recycling. We’re happy to work with them to achieve this.”


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