Coles Posts A$1.09 Billion Profit, but Woolworths' Disney Ooshies Promotion Eats Into Its Momentum
Coles, Australia's second-largest supermarket chain, reported a full-year net profit of A$1.09 billion for fiscal 2026, up 1% on the prior year, with underlying profit — a measure that strips out one-off costs — reaching A$900.77 million. The results, released on Tuesday 25 August 2026, showed Coles gaining supermarket sales and market share against its larger rival Woolworths across the 12 months to June. But Woolworths' Disney Ooshies collectables promotion drove a sharp, temporary sales slump for Coles in July and early August, just as the new fiscal year began. Reuters
The profit result was held back by a A$235 million charge to remediate Coles' staff underpayment scandal — money set aside to repay workers who were paid less than they were legally owed. Without that provision, the bottom line would have been notably stronger. Supermarket profitability grew despite a concurrent slump in alcohol sales and the delayed hit from the Ooshies promotion, which materialised after the fiscal year closed. AFR The Guardian
Woolworths' Disney Ooshies promotion offered collectable figurines featuring Disney, Marvel, and Star Wars characters, distributed to customers who spent A$30 or more in a single transaction. The campaign was scheduled to run through 25 August 2026, but Woolworths exhausted its Ooshies inventory roughly a week ahead of schedule due to stronger-than-expected demand. The Guardian
The consumer response was pronounced. A YouGov survey found nearly two-thirds of parents altered their shopping behaviour because of the promotion, including shopping at Woolworths more frequently. Among adult collectors, one in five told YouGov they intended to resell the figurines online. Woolworths hosted dedicated Ooshies swap meets across Australia in recent weeks to build on the community engagement the promotion generated. The Guardian SMH
For Coles, the competitive impact was concentrated and brief. CEO Leah Weckert described the sales moderation as a "temporary impact" lasting nearly four weeks, concentrated in physical stores rather than online channels. Coles confirmed sales had returned to normal by the time of the results announcement. Prior to the Ooshies disruption, Coles had reported a quarterly sales rise of 5.1%, and sales growth had continued into July before the slump. The Guardian AFR SMH
The scale of the competitive diversion is not trivial. Some analysts estimated Woolworths may have boosted its sales by approximately A$100 million through the promotion, a figure that contextualises the severity of the traffic loss Coles experienced in its physical stores. RBC Capital Markets analyst Michael Toner cautioned the impact could unnerve Coles investors, particularly those assessing the grocer's ability to defend share against well-funded promotional campaigns by its larger rival. SMH The Guardian
This is not the first time Ooshies have distorted the Australian grocery landscape. The 2019 Ooshies craze culminated in two farmers destroying a rare lion figurine live on television in a protest against online bullying. During that earlier cycle, Queensland state school Bellevue Park banned Ooshies outright, citing "distractions, conflict and unfair trading." The recurrence of the promotion, and the intensity of consumer response it has again generated, speaks to the structural role that collectables-driven loyalty mechanics — marketing strategies that use collectible items to keep customers coming back — can play in a duopolistic grocery market where switching costs are otherwise low. The Guardian
The broader question for Coles investors is whether the Ooshies episode is a containable, one-off disruption or a signal of a more durable competitive vulnerability. Weckert's framing of a four-week impact with a return to baseline is reassuring on its face. Yet the speed and magnitude of the customer diversion — roughly A$100 million in incremental competitor sales — shows the asymmetry of a well-tied licensing promotion in a market where the two dominant players compete primarily on proximity, price perception, and periodic promotional intensity. The underpayment remediation charge, while separate from trading performance, adds another layer of pressure on the profit narrative.
Coles' full-year numbers, stripped of the A$235 million provision, would have told a cleaner story of share gains and margin improvement. With the provision included, and with the Ooshies overhang fresh in investors' minds, the results land at a moment when the competitive dynamic between Australia's grocery duopolists is more fluid than steady-state market share data might suggest.
