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Part of a ZDNet Special Feature: Coronavirus: Business and technology in a pandemic

Temporary online delivery changes see Coles Q3 online sales growth slows to 14%

The focus now is to increase more team member numbers to meet online delivery services.

Coles has reported that online sales growth for the third quarter slowed to 14% as a result of temporary changes it made to its online delivery services in response to the novel coronavirus outbreak.

The grocery giant explained how the suspension of its online deliveries and click-and-collect services to all customers in March in order to prioritise serving the elderly, people with disability, and those who are required to self-isolate led to "temporary disruption" for the quarter, and therefore a slowdown in overall online sales.

The decrease in growth is a quarter-on-quarter comparison to its half-year results, when the retailer reported its online business had achieved 24% year-on-year sales revenue growth on the prior corresponding period, which made up 4% of the company's supermarkets sales revenues.

Coles, however, resumed its online delivery services to all customers last week.

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Despite reopening its online delivery service, Coles said at the time it could not guarantee that all orders would be fulfilled. 

"Coles is experiencing high demand for all products. As a result, we are unable to guarantee that you will receive all items in your order," it said. 

"In an effort to fulfil your order as best we can, if an item is unavailable, wherever possible we will select a substitute within the same product category." 

The company said it is now looking to recruit more team members and extend pick and delivery shifts to increase its capacity to meet the demand of online customers.

For the period to March 29, Coles reported total sales reached $9.23 billion, up nearly 12.5%. Of that, its supermarkets business jumped 13% to AU$8.23 billion and its liquor business up 7.2% to AU$740 million.

The company added how refreshing the websites of its three liquor banners boosted online sales by 34% for this particular segment during the third quarter.

"As we all continue to adjust to the many changes that have resulted from the pandemic, Coles is already taking steps to help restore Australia's economic recovery," Coles CEO Steven Cain said.  

"This includes hiring an additional 12,000 team members, continuing our multi-billion dollar capital and operating expenditure plans to underpin future growth, continuing to prioritise value for customers, continuing sporting and community sponsorships, and paying an interim dividend of more than AU$400 million to our shareholders, which directly and indirectly benefits millions of Australians.'

Looking ahead, Coles said it is still unclear how long the various impacts of COVID-19 will have on the business but assures it will "continue to review operational and strategic learnings and opportunities that emerge as we exit COVID-19 that accelerate delivery of our long term plan".

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