Coles records $1 billion in profits, forecasts inflation to keep decreasing

Coles has posted $1.09 billion in profits for the last financial year as the supermarket giant forecasts inflation of fresh produce to continue moderating in the year ahead.

Coles announced its profits had increased by 4.8 per cent on the previous year to $1.09 billion while its sales revenue jumped by 5.9 per cent to $40.5 billion.

The supermarket giant's inflation sat at 6.7 per cent for the 2023 financial year while Australia's consumer price index sits at 6 per cent for the 12 months to June.

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In the fourth quarter of the financial year, inflation slowed to 5.8 per cent at Coles with the supermarket forecasting it to keep decreasing - even for fresh produce.

Coes said decreasing prices for vegetables like cucumbers, broccoli and capsicum are slowing inflation while meat, deli and seafood prices also moderated.

But bakery inflation remained high due to higher wheat commodity prices, the supermarket said.

CEO Leah Weckert said cost of living has been the supermarket's focus and through its programs like dropped and locked and weekly specials, Coles will continue delivering low prices for customers and big profits.

"These initiatives are resonating with customers and we remain well positioned to grow in the current environment as more customers choose to eat at home," Weckert said in her first financial year results as chief executive.

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"Customers want consistent availability and quality, great value and innovative products that make healthy meals easier and more convenient.

"Our team is energised to drive improvements in our operating model and team member capability that will improve productivity and deliver a more consistent customer experience."

There remain challenges, the supermarket said, with eggs and frozen vegetable supply and prices adding to cost pressures.

But the pressures from last year when flooding impacted fresh produce supply has eased and "improved significantly".