Coles quickly moved to take advantage of the pre-Christmas strike of Woolworths warehouse workers, and estimates its efforts resulted in $120 million in additional sales and $20 million in earnings.
Coles said on Thursday that after the industrial action was announced in late November, it worked with its suppliers to increase the supply of products to stores in Victoria and NSW and added team members.
Woolworths indicated on Wednesday that supermarket sales in Victoria hadn't yet recovered from the strike, which ended in December, suggesting some shoppers had switched their loyalty to Coles.
Coles said its new state-of-the-art automated distribution centres in Kemps Creek, NSW, and Redbank, Queensland, showed their value during the 17-day strike, ramping up quickly to support its warehouses in Victoria.
Those investments in modernising Coles' supply chain meant the company's profit slipped slightly in the first half, but sales were up and it will pay a higher dividend.
Coles made a $576 million profit in the 27 weeks to January 5, down 2.2 per cent from a year ago, as it spent $92 million on dual-running costs during the warehouse transition, up from $46 milion a year ago.
Its underlying profit, which excludes those expenses, was up 6.4 per cent to $666 million.
Group sales were up 3.7 per cent to $23 billion, with supermarket sales up 4.3 per cent to $20.6 billion and sales from its Liquorland up 0.8 per cent to $2 billion.
"We had a strong focus on value, fresh quality and availability, which has supported volume-led growth in supermarkets during the half," said group CEO Leah Weckert.
In August Coles opened its second automated distribution centre in Kemps Creek, NSW - about 40km west of Sydney's CBD - on a mammoth site that's about the size of 25 rugby league fields.
But the site is performing well and Coles has plans to build its third automated distribution centre, this time in Truganina, 22km west of Melbourne's CBD.
This $880 million facility will have 15 per cent more capacity than its existing automated warehouses in Kemps Creek and Redbank, Qld, and will deliver full automation of Coles' room-temperature distribution network across eastern Australia.
The project will begin this year and take up to five years to complete, Coles said.
Coles said that in the first seven weeks of the second half, supermarket sales were up 3.4 per cent and liquor revenue up 3.8 per cent.
Coles will pay an interim dividend of 37 cents per share, up 2.8 per cent from a year ago.
