Australia's Coles targets $685 mln in savings over 4 years

Credit: REUTERS/DANIEL MUNOZ

Coles Group Ltd, Australia's second-biggest grocery chain, on Tuesday unveiled a plan to cut A$1 billion ($685.40 million) in costs over the next four years, as it looked to technology to offset rising labour and energy costs.

Adds details on planned cost cuts, CEO quote

June 18 (Reuters) - Coles Group Ltd COL.AX, Australia's second-biggest grocery chain, on Tuesday unveiled a plan to cut A$1 billion ($685.40 million) in costs over the next four years, as it looked to technology to offset rising labour and energy costs.

In its first major strategy update since its demerger from Wesfarmers Ltd WES.AXlast year, Coles said it planned to automate manual tasks and reduce duplication to tackle rising costs.

The supermarket sector is grappling with intense competition as sales and margins get squeezed by cautious consumers and rising costs while economic growth slows in Australia.

"Stores catering to value-focused customers will have a simplified range focused on essential items and self-service," Chief Executive Steven Cain said in a statement.

($1 = 1.4590 Australian dollars)

(Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Matthew Lewis and Richard Chang)

((NikhilKurian.Nainan@thomsonreuters.com; +91 806 749 1637 Reuters Messaging: nikhilkurian.nainan.thomsonreuters.com@reuters.net; Twitter: @NikhilKurianN))

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