Coles says retailing is more competitive

12 Jul 2012, 7:01 pm   -   Source: AAP
Coles managing director Ian McLeod says overseas chains are making retailing more competitive. (AAP)

Coles managing director Ian McLeod says overseas chains are making retailing more competitive. (AAP)

Supermarket operator Coles says overseas chains with "deep pockets" are making the retail environment more competitive.

Supermarket operator Coles says the retail landscape is getting more competitive as big overseas retailers move into the Australian market, but Coles won't be expanding internationally at this stage.

Coles managing director Ian McLeod made the comments in an address to the Australian British Chamber of Commerce on Thursday, not long after eight protesters temporarily interrupted pre-luncheon drinks at Melbourne's Park Hyatt hotel.

Waving big red cardboard "hands" that Coles uses in its price promotions, the protesters chanted "shame, Coles, shame" and called for wages equality for Coles workers before being peacefully escorted from the hotel by staff.

Workers at a Coles warehouse in Melbourne are in a pay dispute with Coles and say action could begin to affect supply at supermarkets.

In his address, Mr McLeod said supermarket retailing in Australia was getting more competitive.

"You've got large-scale retailers like Costco coming into this market, you've got Aldi coming into this market, you've got a strong player in Woolworths and then we've got ourselves (Coles)," he said.

"Relative to the international scale of these organisations, you might only have what might be perceived to be a few stores at the moment in Australia.

"But they've got deep pockets, and they will continue to invest in this country, and they will continue to increase competition, which can only be good for the consumer."

Mr McLeod said Coles was in the final year of a five-year plan to improve its performance and there were a number of areas under consideration for the next stage of the transformation, including multi-channel retailing and more changes to store formats.

"There's a lot of things that we can still do, but it is still going to be domestically-focused," he said.

"If you look at what's happened it's quite hard to pick retailers that have actually managed to go out of their home base and succeed internationally.

"At this stage of our development we think that would be the wrong thing to do."

Mr McLeod said there had been much talk of Coles chasing market share by opening more stores.

But he said Coles had also been closing underperforming outlets, and the group was extending stores and redeveloping stores to make them better.

Mr McLeod also said consumer sentiment was still low and still concerning.

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