Coles has claimed it only makes a small fraction of the money shoppers spend in store, explaining not even a supermarket giant boasting billion-dollar profits is immune to the burden of the cost-of-living crisis.
"For every $100 a customer spends, Coles makes $2.60," Coles said.
It's the second-biggest supermarket in Australia in terms of revenue but that was the figure that caught Yahoo Finance's eye when Coles defended itself against accusations of ripping off Aussies already struggling with a spate of other oppressive costs, like energy and petrol.
"Coles is also not immune to the increased cost of doing business — construction costs, energy prices, the cost of logistics and packaging have all risen," a spokesperson told us.
So, we've broken down Coles' claim so you can understand the cost of employing more than 120,000 Australians, working with "more than 8,000 suppliers and farmers" and "investing in value" for millions of Aussies.
Here's what you need to know so you can decide if it's a "rip-off".
What are Coles profits made up of?
In its 2023 financial year results, these were Coles' big hitters:
Supermarkets: $36.7 billion
Coles Liquor: $3.6 billion
Sale of Coles Express: $988 million
Other: $127 million
The total revenue from this year was $41.471 billion - up 5.3 per cent from the previous year. The net profit was $1.098 billion, up 4.8 per cent from last year.
If we focus on customer spend, the revenue from supermarket and liquor sales (with a little bit of rounding off) was $40.483 billion, but the net profit after tax was $1.042 billion.
And here's where that figure of $2.60 comes from. By taking its net profit after tax ($1.042 billion) and dividing it by the revenue figure ($40.483 billion), Coles determined that for every $100 spent by its customers in the last financial year, it made $2.57 in clear profit.
But where is that money going?
How much does Coles spend on running its business?
Lease costs: In the 2023 financial year, Coles paid more than $1.5 billion in leases, and its additional property costs ended up at $1 billion.
Expansion and renovation: Coles intends to open 15 new supermarkets, close six and renew 50. Meanwhile, the company intends to open 20 new Coles Liquor stores, close six and renew 110.
Security and technology: Coles has also invested in increased security in high-risk stores, AI scan technology, smarter gates, and improvements to fresh-produce specifications, in an effort to combat theft and rising wages.
Staff: In the 2023 financial year, the company paid more than $5 billion in wages.
A report on its financial results said Coles had experienced an increase in costs, due to higher interest rates, lease renewals, new leases, and borrowing costs.
Rising wage costs, increased organised crime and theft, and produce waste due to supply chain disruptions have also hit the company's bottom line. Coles' net debt — excluding lease liabilities — was $521 million.
Coles also said it was investing more than $1 billion to make its supply chain safer, more efficient, and more sustainable. In April, it opened an automated distribution centre (ADC) in Redbank, Queensland, in the largest single capital investment in the supermarket's 109-year history. A second ADC is opening in Kemps Creek, NSW, in 2024.
Coles is also investing more than $1 billion to make its supply chain safer, more efficient, and more sustainable. In April, it opened an automated distribution centre (ADC) in Redbank, Queensland, in the largest single capital investment in the supermarket's 109-year history. A second ADC is opening in Kemps Creek, NSW, in 2024.
Further costs to the business in the last financial year included splashing out $105 million on two automated milk-processing facilities from Saputo Diary Australia, to improve the security of milk supply.
Meanwhile, Coles said it invested in streamlining the shopping experience through its Smarter Selling program between 2019 and 2023, resulting in $1 billion in savings that were "reinvested into the business and used to help offset inflation".
This program included introducing trolley-assisted checkouts at 167 extra stores, improvements to grocery crates for Coles Online deliveries, and compact floor-scrubber machines to reduce manual tasks around delis, seafood, bakeries, and produce.