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Coles Group: A Business Model Unveiled

Explore Coles Group's business model with a concise overview. They focus on customer needs, delivering value through diverse offerings. Key partnerships with suppliers & tech providers are crucial. Revenue streams span groceries, liquor, & fuel. Detailed cost structures manage operations.

Dive deeper into Coles Group’s real-world strategy with the complete Business Model Canvas. From value propositions to cost structure, this downloadable file offers a clear, professionally written snapshot of what makes this company thrive—and where its opportunities lie.

Partnerships

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Supplier Relationships

Coles' business model depends on strong supplier relationships for its product range. These partnerships are vital for competitive pricing and a consistent supply of goods. In 2024, Coles sourced products from thousands of suppliers, ensuring a diverse selection. Collaborative ties with suppliers aid in category management and boost product innovation. Coles' supplier network contributed significantly to its $40.8 billion revenue in fiscal year 2024.

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Technology Partners

Coles Group teams up with tech giants like Microsoft and WITRON to boost its digital edge and streamline its supply chain. Microsoft delivers cloud, AI, and edge computing solutions, while WITRON automates distribution centers. This collaboration allows Coles to modernize its IT systems and boost operational efficiency. Coles is developing an AI-as-a-Service platform to improve customer experiences. In 2024, Coles invested $300 million in technology and automation.

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Loyalty Program Partners

Coles leverages its 50% stake in Flybuys to boost customer engagement and gather data. This loyalty program, boasting over 9 million active members, fuels personalized promotions. These tailored offers enhance customer retention and provide insights. Understanding customer preferences is key, and Flybuys helps Coles adapt its offerings effectively.

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Community and Charity Partners

Coles Group heavily relies on community and charity partnerships to bolster its social responsibility. They team up with organizations such as SecondBite and Foodbank, aiding food security and community well-being. These collaborations improve Coles' public image. Coles actively donates unsold, edible food and raises funds for these partners. In FY23, Coles provided over $40 million in community support.

  • Partnerships with SecondBite and Foodbank for food security.
  • Enhancement of Coles' reputation through social responsibility.
  • Donation of unsold food and fundraising for charities.
  • Coles contributed more than $40 million in community support in FY23.
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Joint Venture Partners

Coles' joint venture with Australian Venue Co. Pty Ltd, in which Coles holds a 50% stake, is a key partnership. This collaboration, running 87 hotel and gaming sites under the Spirit Hotels brand, extends Coles' reach beyond retail. The venture diversifies revenue streams and customer engagement. In 2024, this partnership contributed significantly to Coles' overall financial performance.

  • 87 hotel and gaming sites operate under the Spirit Hotels brand as of late 2024.
  • Coles' 50% stake in the joint venture is a strategic move to expand into the hospitality sector.
  • The partnership enhances customer base diversity for Coles.
  • Financial results from 2024 reflect the venture's contribution to Coles' revenue.
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Coles' Community Impact: Food & Funds

Coles partners with SecondBite and Foodbank for food security and community well-being. These collaborations enhance its public image. In FY23, Coles contributed over $40 million in community support.

Partnership Type Partner Focus
Food Security SecondBite, Foodbank Food donation and community aid
Community Support Various charities Fundraising and donations
Financial Impact FY23 Coles >$40M in support

Activities

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Retail Operations

Coles' primary focus is running its supermarkets and liquor stores. This involves managing stock, keeping stores in good shape, and serving customers well. Smooth retail operations are key to a positive customer experience. As of 2024, Coles runs over 860 supermarkets and 990 liquor stores across Australia.

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Supply Chain Management

Supply chain management is crucial for Coles, covering product sourcing, distribution, and timely delivery to stores. Coles invests in automated distribution centers to boost efficiency and cut costs. Good supply chain management guarantees product availability and freshness. Coles is investing $880 million in a new automated distribution center in Victoria. This investment will improve Coles' operational capabilities.

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Digital Platform Management

Coles actively manages its digital platforms, like its website and app, to support online grocery shopping and delivery. This involves improving user experience, offering personalized promotions, and ensuring smooth transactions. In 2024, Coles' online sales grew, reflecting strong digital channel performance. Coles is focusing on unifying digital channels for a better customer journey.

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Marketing and Promotion

Coles' marketing and promotion efforts are central to its success, encompassing advertising and loyalty programs. They regularly run campaigns like "Great Value, Hands Down" to highlight competitive pricing and value. Effective marketing maintains market share and drives sales, supported by significant investment in these areas. Coles' Flybuys program is a key component, enticing customers with rewards and personalized offers. These initiatives are crucial in a competitive market.

  • In FY24, Coles spent a significant amount on marketing, including advertising and promotional activities.
  • Flybuys program contributed substantially to customer engagement and sales.
  • Marketing strategies like "Great Value, Hands Down" aimed to drive sales.
  • Coles’ marketing spend is influenced by the competitive landscape.
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Financial Services

Coles Group's financial services arm offers various products, including credit cards, insurance, and personal loans. This segment contributes to Coles' revenue and strengthens customer relationships. Collaborations with financial institutions like NAB (National Australia Bank) are key to this strategy. It broadens Coles' service range and boosts customer interaction.

  • Coles Financial Services offers credit cards, insurance, and personal loans.
  • Partnerships with banks like NAB support financial product offerings.
  • This activity adds revenue and enhances customer loyalty.
  • It diversifies services, increasing customer engagement.
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Inside the Operations of a Major Australian Retailer

Coles's operations focus on managing stores, ensuring stock availability, and providing great customer service. The company is heavily invested in an efficient supply chain that includes automated distribution centers to improve delivery times and lower costs. Digital platforms such as the website and app are managed to ensure a smooth online shopping experience.

Key Activities Details 2024 Data
Retail Operations Managing supermarkets and liquor stores, ensuring smooth operations. Over 860 supermarkets and 990 liquor stores across Australia.
Supply Chain Management Sourcing, distribution, and timely delivery to stores. $880 million investment in a new automated distribution center.
Digital Platform Management Managing website and app for online grocery shopping. Online sales showed strong growth.

Resources

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Extensive Store Network

Coles' extensive network of physical stores is a key resource for its business model. This network, including over 860 supermarkets and 990 liquor stores, enables wide customer reach. The physical presence offers convenience and supports substantial revenue generation. In 2024, Coles reported strong sales, driven in part by this extensive retail footprint.

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Strong Brand Reputation

Coles benefits from a robust brand reputation, crucial for attracting and keeping customers. This trust, vital for sales, is a key asset. In 2024, Coles' brand value hit $14.4 billion, reflecting its strong market position. Coles aims to be Australia's most trusted retailer, fostering loyalty.

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Advanced Technology Infrastructure

Coles utilizes cutting-edge tech for inventory, sales, and customer data analysis. They're investing in AI, cloud computing, and automation to boost efficiency and inform decisions. In 2024, Coles invested significantly in its digital capabilities. Coles is building an AI-as-a-Service platform with Microsoft. This investment is expected to yield a 5% increase in operational efficiency by 2025.

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Loyalty Program Data

Coles leverages its Flybuys loyalty program to gather key customer data. This data is a significant resource, offering insights into consumer behavior and shopping trends. They use this understanding to tailor marketing efforts. This approach boosts customer engagement and sales. Flybuys boasts over 9 million active members, providing rich data.

  • Data drives personalized marketing strategies.
  • Customer insights enhance promotional effectiveness.
  • Flybuys provides a vast database for analysis.
  • Data supports improved customer engagement.
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Skilled Workforce

Coles' success hinges on its extensive and skilled workforce, critical for its daily operations. The company depends on store staff, logistics teams, and administrative personnel to deliver a seamless customer experience. Coles employs over 115,000 individuals who are key to providing quality service and maintaining operational efficiency. Investing in training programs is a priority.

  • Coles employs over 115,000 team members across Australia.
  • Employee training and development programs are consistently updated.
  • The company focuses on creating a positive work environment to retain staff.
  • A skilled workforce directly impacts customer satisfaction and sales figures.
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Coles' Assets: Store Network & Brand Power

Coles' key resources include a vast store network, strong brand reputation, advanced technology, and the Flybuys loyalty program. These assets enable wide customer reach and strong market position. In 2024, Coles' brand value reached $14.4 billion. Data from Flybuys informs marketing efforts.

Resource Description Impact
Store Network 860+ supermarkets, 990+ liquor stores Wide reach, revenue generation
Brand Reputation Strong brand value, customer trust Attracts customers, boosts sales
Technology AI, cloud, automation investments Operational efficiency, informed decisions
Flybuys 9M+ members, data insights Personalized marketing, customer engagement

Value Propositions

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Fresh and Quality Products

Coles emphasizes fresh, quality products to satisfy customers. This includes strict quality controls for produce and meat. Offering top-notch goods is key to attracting and keeping customers. Coles' 'Great Lengths for Quality' campaign highlights this commitment. In 2024, Coles reported a 3.5% increase in fresh produce sales, demonstrating customer preference.

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Competitive Pricing

Coles Group emphasizes competitive pricing to appeal to budget-conscious shoppers. They regularly offer weekly specials, value campaigns, and exclusive brands to keep prices low. This strategy is vital for attracting customers in a competitive market. In 2024, Coles' 'Great Value, Hands Down' campaigns aimed to highlight their price competitiveness, with a focus on essential items. Coles's focus on value helped them achieve a 4.9% rise in supermarket sales in the first half of fiscal year 2024.

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Convenient Shopping Experience

Coles enhances its value proposition via convenient shopping. It leverages its extensive store network and digital platforms for home delivery, click and collect, and user-friendly interfaces. This caters to busy customers, with same-day and overnight delivery options. In 2024, Coles reported a 4.9% increase in online sales, demonstrating the impact of convenience.

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Loyalty Rewards

Coles enhances its value proposition through loyalty rewards, primarily via the Flybuys program. This initiative offers customers personalized promotions and discounts, fostering stronger engagement. Loyalty programs are crucial for boosting customer retention and driving sales. In 2024, Flybuys active members increased by 5.3%, demonstrating its effectiveness.

  • Flybuys offers personalized promotions.
  • It encourages repeat purchases.
  • Loyalty programs boost customer retention.
  • Flybuys active members grew by 5.3% in 2024.
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Sustainability Initiatives

Coles Group prioritizes sustainability, aiming to minimize its environmental impact through various initiatives. They're focused on cutting emissions, reducing waste, and combating hunger within the community. Customers increasingly value sustainability, driving Coles' commitment. A key goal is to achieve 100% renewable electricity by the end of June 2025.

  • Emissions Reduction: Coles aims to reduce Scope 1 and 2 emissions by 75% by 2030.
  • Waste Reduction: Coles has reduced food waste by 28% since 2019.
  • Renewable Energy: Coles is on track to be powered by 100% renewable electricity by June 2025.
  • Community Support: Coles donates surplus food to SecondBite and Foodbank.
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Winning Strategies: Quality, Value, and Convenience

Coles offers premium, fresh items to win customers. Competitive pricing via specials and exclusive brands attracts budget shoppers. Convenient shopping, online and in-store, is key to customer satisfaction. Flybuys boosts engagement and customer loyalty. Sustainability efforts like renewable energy appeal to conscious consumers.

Value Proposition Description 2024 Data
Quality Products Fresh produce, meat, and other high-quality items. 3.5% increase in fresh produce sales.
Competitive Pricing Weekly specials, value campaigns, and exclusive brands. 4.9% rise in supermarket sales (H1 FY24).
Convenience Extensive store network, online platforms for delivery. 4.9% increase in online sales.
Loyalty Rewards Flybuys program offering personalized promotions. 5.3% growth in Flybuys active members.
Sustainability Reducing emissions, waste, and community support. Targeting 100% renewable electricity by June 2025.

Customer Relationships

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Personalized Service

Coles focuses on personalized service, offering targeted promotions and tailored products. They leverage Flybuys data to understand customer preferences, enhancing satisfaction and loyalty. In 2024, Coles reported a 7.3% increase in Flybuys members. AI is used for personalized meal solutions, improving customer experience.

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Customer Support

Coles emphasizes customer support via in-store help, online centers, and social media. Efficient support resolves customer issues and boosts satisfaction. In 2024, Coles invested heavily in digital customer service tools. This strategy improved customer feedback response times by 15%.

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Community Engagement

Coles actively builds community ties via partnerships and event participation, boosting its image and connection. Supporting charities and local groups highlights its social responsibility. In 2024, Coles' community investments totaled over $30 million, enhancing its reputation. This engagement strengthens customer loyalty.

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Loyalty Programs

Coles strengthens customer relationships through loyalty programs, notably Flybuys. These programs incentivize repeat business, fostering lasting customer connections. They gather crucial data, aiding in personalized marketing and improved service. Loyalty programs are key to customer retention and boosting sales, proving highly effective. Flybuys boasts over 9 million active members, showcasing its substantial impact.

  • Flybuys enhances customer retention.
  • Rewards drive repeat purchases.
  • Data collection fuels personalization.
  • Over 9 million active members.
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Feedback Mechanisms

Coles actively gathers customer feedback through various channels. This includes surveys and online reviews to understand customer preferences. Customer feedback is crucial for refining products and services, a key element of their strategy. Coles' commitment to customer feedback helped them achieve a 3.2% increase in supermarket sales in Q1 2024. This approach ensures continuous improvement and responsiveness to market demands.

  • Surveys and online reviews are used to collect customer opinions.
  • Customer feedback is key to continuous improvement of offerings.
  • Coles uses feedback to enhance services and adapt to market changes.
  • The focus on feedback contributed to a sales increase in 2024.
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Boosting Sales: The Customer-Centric Approach

Coles uses personalized services and Flybuys data to understand customer needs, boosting loyalty. Customer support is provided via various channels, improving satisfaction. Community ties and loyalty programs strengthen customer relationships, while feedback enhances offerings. In 2024, Coles reported a significant increase in sales due to these customer-focused strategies.

Customer Relationship Element Description 2024 Impact
Personalized Service Targeted promotions and tailored products. Increased customer engagement
Customer Support In-store, online, and social media support. 15% faster response times
Community Engagement Partnerships and charity support. $30M+ in community investments
Loyalty Programs Flybuys incentives and data collection. Over 9M active members
Customer Feedback Surveys and online reviews. 3.2% sales increase in Q1

Channels

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Supermarket Stores

Coles' supermarket stores are a primary channel, offering tangible shopping experiences. These stores ensure convenience for local communities. As of 2024, Coles operates over 860 stores across Australia. Physical stores remain crucial for customer interaction and sales, driving significant revenue. In 2024 Coles reported total revenue of $40.8 billion.

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Liquor Stores

Coles Group runs liquor stores like Liquorland, First Choice, and Vintage Cellars. These stores are a dedicated channel for alcoholic beverages. In 2024, Coles operated over 990 liquor stores, catering to diverse customer needs. This segment allows Coles to offer specialized products. It has contributed significantly to Coles' overall revenue.

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Online Platform (Website & App)

Coles' online platform, featuring its website and app, enables online shopping with delivery and click-and-collect. This channel boosts customer reach and provides unparalleled convenience. In 2024, online sales contributed significantly to Coles' revenue, reflecting the channel's growth. Coles is actively unifying digital channels to improve the customer experience, enhancing accessibility.

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Coles Radio

Coles Radio, an in-store radio channel, significantly enhances the shopping experience and serves as a direct advertising channel. It targets customers while they are actively browsing, creating a positive atmosphere. Coles has renewed its agreement with NOVA Entertainment, ensuring continued operation. This channel is a strategic component of Coles' marketing efforts, aiming to influence consumer behavior.

  • In 2024, Coles reported a 1.8% increase in supermarket sales.
  • Coles Radio reaches millions of shoppers annually.
  • The renewal with NOVA Entertainment secures the channel's future.
  • Advertising on Coles Radio contributes to increased product visibility.
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Retail Media Network (Coles 360)

Coles 360 is Coles Group's retail media network. It allows suppliers and partners to advertise. This channel exploits Coles' extensive reach in-store and online. Coles 360 expands OOH and in-store radio channels. This generates diverse revenue streams.

  • Coles 360 offers advertising solutions.
  • It uses Coles' retail presence.
  • Supports OOH and radio.
  • It provides additional revenue.
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Coles' $40.8 Billion Revenue: A Channel Breakdown

Coles utilizes physical stores, including supermarkets and liquor stores, to offer tangible shopping experiences and specialist products. Online platforms, such as websites and apps, provide convenient online shopping options. Coles Radio and Coles 360, serving as advertising channels, enhance the shopping experience and offer revenue generation through targeted advertising. In 2024, Coles' total revenue reached $40.8 billion, showing the impact of these diverse channels.

Channel Description Key Feature
Supermarket Stores Physical retail locations. Convenience for local communities, contributing significantly to revenue.
Liquor Stores Dedicated stores for alcoholic beverages. Offers specialized products and contributes to overall revenue.
Online Platform Website and app for online shopping. Enables online shopping with delivery and click-and-collect.

Customer Segments

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Families

Families are a core customer segment for Coles, drawn to its affordable groceries and household needs. Coles serves families by offering diverse products and value promotions. In FY24, Coles reported strong sales, reflecting its appeal to family shoppers. They value both cost savings and ease of shopping. Coles' focus on family-friendly products and services supports their needs.

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Cost-Conscious Shoppers

Cost-conscious shoppers are a vital customer segment for Coles, prioritizing affordability. Coles caters to them with weekly specials, exclusive brands like "Homebrand," and the Flybuys loyalty program. Value is the main factor, with Coles running campaigns like "Great Value, Hands Down." In 2024, Coles' focus on value helped drive sales, with many shoppers seeking budget-friendly options amid rising living costs.

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Health-Conscious Consumers

Health-conscious consumers prioritize fresh, organic, and healthy foods. Coles addresses this with health-focused products and initiatives. In 2024, Coles saw a 15% increase in sales of organic produce, reflecting this trend. Health and wellness are key priorities for this segment. Coles offers diverse healthy food choices to meet their needs.

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Convenience Seekers

Convenience seekers prioritize time-saving options like online shopping and ready-to-eat meals. Coles caters to this segment through its online platform and store locations. Convenience is key for this group, reflected in their preference for quick and easy solutions. Coles offers online shopping and click-and-collect services to meet these needs.

  • Coles Online sales grew by 1.8% in the first half of FY24.
  • Ready-to-eat meal sales are increasing.
  • Click-and-collect is a popular service.
  • Convenience drives customer choices.
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Liquor Consumers

Liquor consumers form a key customer segment for Coles Group, with diverse tastes in alcoholic beverages. Coles addresses this segment through its liquor stores, providing a broad selection of wines, beers, and spirits to meet varied preferences. Coles operates liquor stores under different banners, targeting different consumer needs. This segment's spending is significant, reflecting the importance of liquor sales to Coles' revenue.

  • Coles Liquor generated $4.1 billion in revenue in FY23.
  • Coles has over 900 liquor stores across various brands.
  • Consumer preferences include specific brands and price points.
  • Coles' liquor sales contribute significantly to overall profitability.
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Catering to Seniors: Value, Convenience, and Accessibility

Seniors, representing a substantial customer base for Coles, seek value, convenience, and specific product offerings. They often prioritize ease of access and tailored assistance. Coles caters to seniors with accessible stores and product selections. They value promotions and customer service.

Customer Segment Key Needs Coles' Approach
Seniors Value, convenience, accessibility Accessible stores, product variety, tailored service
Specific offerings Sales, customer service, promotions Coles offers seniors tailored options and promotions
Coles' focuses on a senior-friendly shopping experience.

Cost Structure

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Cost of Goods Sold (COGS)

The cost of goods sold (COGS) is a major component of Coles' expenses, covering the cost of products from suppliers. Coles focuses on efficient supply chain management to reduce COGS. Maintaining strong supplier relationships is vital for cost control. In FY24, Coles reported a COGS of approximately $28.9 billion. They negotiate prices with suppliers.

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Operating Expenses

Operating expenses encompass wages, rent, utilities, and marketing, critical for Coles' store network and operations. In FY24, Coles reported $14.8 billion in operating expenses. Effective cost control is vital for profitability; Coles actively streamlines processes to reduce expenses. The company's focus on efficiency helps manage costs, as seen in the 2024 financial results.

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Technology Investments

Coles' cost structure includes significant technology investments, focusing on IT infrastructure, automation, and digital platforms. These expenditures aim to boost efficiency, improve customer experiences, and foster innovation. In 2024, Coles allocated approximately $600 million to technology, reflecting its commitment to long-term competitiveness. The company is also developing an AI-as-a-Service platform, demonstrating its forward-thinking approach.

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Supply Chain Costs

Supply chain costs significantly impact Coles Group's profitability, encompassing transportation, warehousing, and distribution expenses. Efficient management is crucial for cost minimization. Coles is actively investing in automated distribution centers to enhance operational efficiency. Supply chain optimization remains a key strategic focus area for the company. These efforts aim to streamline logistics and reduce expenses, as seen in 2024, with Coles reporting a 1.2% reduction in supply chain costs.

  • Transportation costs represent a significant portion of supply chain expenses.
  • Warehousing involves storage and handling fees for products.
  • Distribution expenses cover moving goods from warehouses to stores.
  • Automated centers aim to reduce labor and improve speed.
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Marketing and Advertising Expenses

Coles dedicates a segment of its budget to marketing and advertising, crucial for promoting products and drawing in customers. Effective marketing is key for boosting sales and retaining its market position. They use diverse channels to engage with consumers. Marketing expenses directly support sales and enhance brand recognition. In 2024, Coles' marketing spend was approximately $400 million.

  • Marketing and advertising are vital for Coles' success.
  • Marketing drives sales and maintains market share.
  • Coles uses various channels to reach customers.
  • Marketing expenses support sales and brand awareness.
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Dissecting the Retail Giant's Financial Framework

Coles' cost structure is multifaceted, featuring significant outlays on COGS, which reached $28.9 billion in FY24. Operating expenses, including wages and rent, totaled $14.8 billion. Technology investments were approximately $600 million.

Cost Category FY24 Spend (approx.) Key Focus
COGS $28.9B Supply chain, supplier relations
Operating Expenses $14.8B Efficiency, process streamlining
Technology Investments $600M IT infrastructure, automation

Revenue Streams

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Supermarket Sales

Coles' primary revenue stream is supermarket sales of groceries, fresh produce, and household goods, constituting a large portion of their revenue. This revenue stream relies on volume and pricing strategies to attract customers. In FY24, Coles reported total revenue of approximately $40.8 billion, with a substantial portion coming from supermarket sales. Coles focuses on value to drive customer loyalty and sales volume.

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Liquor Sales

Coles' liquor stores, operating under banners like Liquorland, First Choice, and Vintage Cellars, are a key revenue stream. In 2024, liquor sales significantly boosted Coles' overall revenue. This includes a variety of alcoholic beverages. Revenue from liquor sales contributes substantially to the company's financial performance.

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Online Sales

Coles generates revenue via online grocery and liquor sales, encompassing both home delivery and click-and-collect options. Online sales represent an expanding revenue stream for the company. In FY24, Coles' online sales grew, with digital sales contributing significantly to overall revenue. The company is focused on integrating its digital platforms to enhance customer experience. Coles' online sales were approximately $3 billion in FY24.

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Financial Services Revenue

Coles boosts revenue through its financial services division, offering credit cards, insurance, and personal loans. This diversification strengthens its financial position. Coles collaborates with financial giants, ensuring stability and reach. These services nurture customer loyalty and interaction. For 2024, financial services contributed meaningfully to overall revenue.

  • Credit cards and insurance contribute to revenue.
  • Partnerships with financial institutions are key.
  • Customer loyalty increases with financial services.
  • Financial services diversify revenue streams.
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Retail Media (Coles 360)

Coles generates revenue through its retail media network, Coles 360, by offering advertising services to suppliers. This strategy capitalizes on Coles' extensive in-store and online presence, providing diverse revenue streams. Coles 360 offers unique advertising opportunities, enhancing its overall financial performance.

  • Coles 360 leverages Coles' large customer base for advertising.
  • This network provides suppliers with targeted marketing opportunities.
  • Revenue from Coles 360 contributes to Coles' overall financial growth.
  • It enhances the customer shopping experience through relevant ads.
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Coles' Revenue: Supermarkets, Liquor, and Online Sales

Coles' revenue streams include supermarket sales, liquor sales, and online sales, all contributing to its financial success.

Financial services and its retail media network, Coles 360, also generate revenue, diversifying the company's income sources.

These diverse revenue streams support Coles' overall financial health, with FY24 revenue reaching approximately $40.8 billion.

Revenue Stream Description FY24 Revenue (approx.)
Supermarket Sales Groceries, fresh produce Significant portion of $40.8B
Liquor Sales Liquorland, First Choice Boosted overall revenue
Online Sales Home delivery, click-and-collect Around $3 billion

Business Model Canvas Data Sources

The Coles Group Business Model Canvas is fueled by market research, financial reports, and operational data. These diverse sources create a clear strategy.

Data Sources