Woolworths Limited has a reputation of being a defensive stock with better than average profit growth and steadily increasing returns to investors. The supermarket retail industry in Australia is dominated by Woolworths and its key competitor, Coles Supermarkets (which is part of Coles Group Limited). In the last few years Coles Supermarkets has emerged as a reinvigorated competitor to Woolworths, with investment in new stores and a strong branding campaign.

1 Obtain the Coles Group annual report for 2021. Read some background about the company (the Managing Director and CEO’s report is a good place to begin) and identify the operating divisions of the Coles Group. How are they similar to Woolworths and how are they different from Woolworths?

2 Find the income statement and balance sheet. Using this information, calculate the following ratios for the Coles Group: ROE, ROA, alternative ROA, profit margin, alternative profit margin and gross profit.

3 Compare the profitability of the Coles Group from 2020 to 2021, and use the DuPont formula to help explain any changes observed.