Coles confirms 438 Melbourne job cuts - The Australian

COLES has confirmed it will cut 378 permanent jobs across its Melbourne operations, while 60 contractor positions will also be cut from its Tooronga-based store support centre.

The job cuts were flagged yesterday when media reports suggested up to 600 jobs may be lost as the supermarket giant forges ahead with a restructure of its Melbourne support centre.

The Wesfarmers-owned Coles said there were opportunities for 160 of the axed workers to be redeployed across the company.

“All departing team members will be provided with extensive support, including career transition services and, of course, their full entitlements,” Coles chief executive Mr John Durkan said today.

He added that no jobs will be sent offshore as part of the restructure.

Mr Durkan explained the job cuts were designed to simplify systems and processes, “allowing for a more efficient and productive organisation” to support further growth in Coles’ supermarkets and outlets.

The supermarket giant looked to offset today’s job cuts in Melbourne by reiterating its growth plans for Victoria as a whole, saying Coles was slated to open 14 new stores across the state in the next three years.

“As part of Coles’ expanding financial services offer, we plan to create more than 70 positions,” Mr Durkan said.

In August, Wesfarmers said it lifted its full-year profit and flagged plans to return $1.1 billion in surplus capital to shareholders, as it eyed future growth from its retail businesses.

Revenue for Coles increased 4.5 per cent to $37.4 billion in the year, due to simplified operations, improved efficiency and new store openings.

Despite a long-running ­efficiency program since Wesfarmers bought Coles in 2007, the chain’s margins are still a long way behind those of Woolworths, at 5.3 per cent compared with 7.9 per cent.

Mr Durkan, who was promoted to chief executive in July, said in a speech to investors in May that the retailer still lagged its global peers in sales per square metre, supply chain ­efficiency and the cost of doing business.

“We can move the dial quite considerably and on some of those things we can become world leaders,” he said.

Last month, Coles’s comparable sales growth rose 4.1 per cent, compared with Woolworths’ 3.3 per cent increase, extending Coles’s supremacy in sales growth to 20 consecutive ­quarters.