Coles Made Over A$1 Billion This Year — But a Toy Giveaway at Rival Woolworths Hurt Its Sales

Coles, Australia's second-biggest supermarket chain, made a net profit of A$1.09 billion for the year, up 1% from the previous year. The results were released on Tuesday 25 August 2026. Over the 12 months to June, Coles grew its supermarket sales and gained market share against its bigger rival, Woolworths. But a collectable toy promotion at Woolworths called Disney Ooshies caused a sharp but temporary drop in Coles' sales in July and early August. Reuters

The profit result was weighed down by a A$235 million charge to fix a staff underpayment scandal — a situation where Coles had paid some workers less than the legal minimum. The company set that money aside to repay affected staff. Without this cost, the profit would have looked much better. Supermarket profits grew despite a slump in alcohol sales and the sales dip caused by the Ooshies promotion, which hit after the financial year had already ended. AFR The Guardian

So what were Ooshies? They were small collectable figurines featuring characters from Disney, Marvel, and Star Wars. Woolworths gave them to customers who spent A$30 or more in a single shop. The promotion was supposed to run through 25 August 2026, but Woolworths ran out of stock about a week early because demand was much higher than expected. The Guardian

People went to surprising lengths for them. A YouGov survey found nearly two-thirds of parents changed their shopping habits because of the promotion, including going to Woolworths more often. One in five adult collectors told YouGov they planned to resell the figurines online. Woolworths even hosted Ooshies swap meets across Australia to tap into the excitement the promotion created. The Guardian SMH

For Coles, the damage was short-lived. CEO Leah Weckert called the sales drop a "temporary impact" that lasted about four weeks, mostly in physical stores rather than online. Coles said sales had returned to normal by the time it announced its results. Before the Ooshies disruption, Coles had reported a quarterly sales rise of 5.1%, and growth had continued into July before the slump. The Guardian AFR SMH

The scale of the shift was significant. Some analysts estimated Woolworths may have boosted its sales by about A$100 million through the promotion, which helps explain how much foot traffic Coles lost in its physical stores. RBC Capital Markets analyst Michael Toner warned the impact could worry Coles investors, especially those looking at whether the grocer can hold its ground against well-funded promotional campaigns by its bigger rival. SMH The Guardian

This is not the first time Ooshies have shaken up Australian grocery shopping. During the 2019 Ooshies craze, two farmers destroyed a rare lion figurine live on television to protest online bullying. Back then, a Queensland state school called Bellevue Park banned Ooshies entirely, calling them a source of "distractions, conflict and unfair trading." The fact that the promotion has returned and again generated this level of consumer excitement shows how powerful collectable giveaways can be in a market where only two big players compete and customers can easily switch between them. The Guardian

The bigger question for Coles investors is whether the Ooshies episode was a one-off disruption or a sign of a deeper weakness. Weckert's description of a four-week dip with a return to normal is reassuring at first glance. But the speed and size of the customer shift — roughly A$100 million in extra sales for the competition — reveals how much a well-designed licensing promotion can tilt the scales in a market where the two dominant players compete mainly on location, price perception, and occasional big promotions. The underpayment charge, while unrelated to everyday trading, adds another layer of pressure on the profit story.

Without the A$235 million underpayment charge, Coles' full-year numbers would have told a cleaner story of market share gains and improved profit margins. With the charge included, and with the Ooshies disruption fresh in investors' minds, the results arrive at a moment when the balance of power between Australia's two grocery giants is more uncertain than the market share figures alone might suggest.