Sainsbury’s signs wholesale deal with Australia’s Coles
Sainsbury’s has agreed a deal to provide Australian supermarket Coles with own-brand products as the UK grocery giant seeks to strengthen its wholesale business.
The range, which will be labelled under the Coles brand, will include packaged groceries and household products.
Read more: Sainsbury’s half-year profits slide
Through the deal, Sainsbury’s will also analyse which Australian products it can source in order to bring new propositions to UK customers.
Sainsbury’s is seeking to improve its wholesale business after the competition watchdog blocked its £7.3bn tie-up with Asda in April.
The supermarket is falling behind in the wholesale market compared to its competitors. Tesco bought wholesaler Booker for nearly £4bn last year, and Morrisons has a number of deals with retailers Amazon and McColl’s.
Sainsbury’s director of business development Michael Luck said: “Coles is one of Australia’s leading food retailers and we are delighted to enter into this new partnership with them.
“Great quality food, high standards and ethical sourcing are at the heart of both our businesses and we are delighted to work with Coles to bring more choice and innovation to Australian customers.”
Greg Davis, Coles chief executive of commercial and express, said: “We want to accelerate the introduction of innovative products to Coles own brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia.”
Last week Sainsbury’s posted a 92 per cent plunge in half-year profit as costs from store closures took a toll on its balance sheet, while like-for-like sales dipped one per cent.
Read more: Two Sainsbury’s executives to step down in board room shake up
The retailer blamed cost savings, higher marketing costs and tough weather comparatives for its fall in profit and sales.
However, the grocery chain said second half results were expected to pick up as last year’s staff wage hike becomes annualised and market level costs level out.