Coles’ supermarket comparable sales grew 2.7% in the quarter, cooling from a 4.6% rise a year earlier, as opening-year momentum faded.

Sales slowed in the early part of the new financial year, with total revenue missing consensus and growth expected to ease further as competitors stepped up promotions and shoppers compared prices across retailers.

First-quarter supermarket revenue rose 3.6% to A$10.32 billion, slightly below Visible Alpha’s A$10.39 billion estimate.

Investors are watching how Coles balances price promotions, cost pressures, and ongoing investments in automation and online fulfilment, all of which affect margins and profitability.

The dividend yield could rise if the share price falls, but payout depends on earnings backing the distributions.

Two valuation lenses are presented: a DCF-based undervaluation around 5% versus a higher P/E view, signaling mixed sentiment on fair value.

The piece frames Coles’ moves as a direct rivalry with Woolworths, underscoring the fierce competitive dynamic.

Risks include potential regulatory pressure reducing pricing power and ongoing weaknesses in Coles’ Liquor division weighing on earnings.

Coles is relaunching its Everyday Price programme to lock in lower prices for six months and launching an exclusive Christmas range to regain momentum.

The price relaunch pairs extended low prices on selected items with Coles’ largest-ever exclusive Christmas range to drive steady basket sizes in the peak season.

Coles is restoring momentum after a softer-than-expected early next-quarter update and a share-price drop to pandemic-era lows by expanding price competitiveness and exclusive ranges.

Coles is a constituent of the ASX 50, reflecting its scale and influence amid competition with Woolworths and regulatory scrutiny on pricing.