Woolworths faces market setback as coles gains ground

Wednesday 27 August 2025 - 11:00

By: Sahili Aya

Woolworths faces market setback as coles gains ground

Australia’s largest supermarket chain, Woolworths, has seen its market value drop by over $5 billion as it faces challenges in restoring customer “price trust” and managing product availability. Sales for the year to June rose just 3%, with July and August growth at 2% compared to last year, while profits fell by 20% to nearly $1.4 billion.

In contrast, Coles has seen sales growth of 4% for the year to June and 5% for July and August, lifting annual profits above $1 billion and pushing its market value to a record $31 billion. Analysts suggest Woolworths is losing market share to Coles due to stock shortages and underperforming promotions, despite cutting prices on 500 items in 2025 to regain customer trust.

CEO Amanda Bardwell noted that rebuilding trust is a long-term effort and blamed the underperformance of short-term promotions on customer fatigue. Issues with stock availability, exacerbated by industrial action at warehouses, have also impacted Woolworths’ performance.

Meanwhile, Coles’ expanding distribution centres and improved delivery systems have enhanced product availability, boosting margins and customer satisfaction. Despite challenges, analysts believe both Woolworths and Coles will maintain their dominant positions in the Australian supermarket sector.