Coles targets $1bn cost reduction by FY23
COLES says its supermarkets will make $1 billion in cumulative savings over the next three years thanks to investments in technology, automation, and artificial intelligence.
The supermarket giant has set the target as part of a new corporate strategy for its first investor day since listing on the ASX in November 2018.
"Our strategy directly aligns with the creation of long-term shareholder value by growing revenue at least in line with the market, reducing costs, and generating sufficient cash to fund growth and innovation while delivering an attractive dividend payout ratio," chief executive Steven Cain said on Tuesday.
The supermarket chain cited the use of data analytics and artificial intelligence along with "optimising" its store network by tailoring up to 40 per cent of floor space to meet specific local customer requirements.
The move follows March's announcement of a $150 million spend over four years to double Coles' home delivery capacity using tech from UK online supermarket Ocado.
At the same time, it also made a $146 million pre-tax provision in its first-half results as part of a distribution network overhaul that will cut both costs and jobs.
In a trading update on Tuesday, Coles said comparable sales growth for the fourth quarter is expected to be between 1.7 and 2.1 per cent, adjusted for the impact of New Year's Eve.
That is in the forecast upper half of the range between second quarter's 1.3 and the third quarter's 2.1 per cent.