Coles is taking its sales game to the next level with the help of artificial intelligence (AI). The supermarket giant announced that it will use AI to better target sales to specific customer groups, as it works to bounce back from an 11.3% drop in profits for the second half of 2025. The company is focusing on larger, more impactful promotions to cater to customer needs, hoping to rebuild trust after the consumer watchdog launched a lawsuit over its controversial “Down Down” sales prices.
AI in Retail: A Smart Shift for Coles
In an effort to adapt to the increasingly competitive retail market, Coles is shifting gears by leveraging AI in a more strategic way. According to chief commercial officer Anna Croft, AI will help the company identify the best promotions to meet specific customer needs. By using data-driven insights, Coles plans to target its sales to key demographics, providing better value and convenience for shoppers. “We’re just really focused on actually using data and AI on ‘how do we get the right promotions to meet the right customer cohorts,” Croft said, reports Yahoo Finance.
While the supermarket has used AI in various forms before, this new approach signals a significant move towards more tailored sales strategies. It’s not just about offering deals; it’s about offering the right deals for the right shoppers. In an era where personalization is key, Coles hopes this move will drive customer loyalty and boost sales in the long run.
Legal Issues and Trust in Coles
Despite the positive talk about AI, Coles is still grappling with the fallout from the ongoing lawsuit over its “Down Down” prices. The Australian Competition and Consumer Commission (ACCC) has accused the supermarket of misleading customers about the authenticity of its discounts, calling them “illusory.” These accusations have hurt the company’s reputation, and Coles is under pressure to restore its credibility.
Croft emphasized that rebuilding consumer trust would be key to Coles’ recovery. While the company did not comment on the outcome of the lawsuit, Croft hinted that Coles is committed to working through the issues and ensuring transparency in future campaigns. She also mentioned that the retailer would be shifting toward “everyday low prices” for some product categories and doing fewer, but more substantial, promotions.
Profits Drop, But Coles Holds Steady
While Coles reported an 11.3% drop in profits, it still posted a solid $511 million profit for the second half of 2025. The company’s supermarket business saw an increase in gross margins, from 27.1% to 27.8%. However, Coles has also been hit with an additional $165 million to cover penalties for underpaying staff—an issue shared with rival Woolworths. Despite these setbacks, Coles CEO Leah Weckert remains optimistic about the company’s ability to compete in the highly competitive grocery sector.
For now, Coles is focusing on fine-tuning its approach with AI and ensuring it delivers value in a more personalized way for shoppers. While it’s facing some major challenges—especially regarding consumer trust—the retailer is hoping these strategic changes will turn things around. The coming months will reveal if AI can truly transform the shopping experience and help Coles recover from a tough period.
