The S&P/ASX 200 Consumer Staples Index has shown resilience, rising by 0.75% on Friday, while the broader S&P/ASX 200 Index has slightly declined by 0.16%, settling at 8,814.1 points. Despite a modest 0.06% increase in consumer staples shares this year, experts have identified two significant players in the sector—Coles Group Ltd and Endeavour Group Ltd—that they recommend investors consider selling.
Coles Group Ltd Faces Profit-Taking Pressure
Coles Group Ltd (ASX: COL), currently trading at $22.33, has experienced an impressive rise, climbing 18.25% since the beginning of the year. The supermarket chain recently reported strong financial results for the full year 2025, with supermarket sales revenue increasing by 4.3% when adjusted for normalised comparisons. Liquor sales, however, only rose by 1.1% amid ongoing cost-of-living challenges. In the first quarter of fiscal year 2026, total group sales revenue grew by 3.9% compared to the prior period.
Tony Locantro from Alto Capital has issued a sell rating on Coles, advocating for profit-taking given its recent share price surge—from $18.47 on March 19 to a peak of $24.28 in September—before settling back to its current level. Locantro stated, “Coles has enjoyed a good run, so we would be inclined to take some profits given cost-of-living pressures are persisting in a relatively slow-growing economy.”
Endeavour Group Ltd Struggles Amid Market Challenges
Endeavour Group Ltd (ASX: EDV) is also under scrutiny, with its share price at $3.67, reflecting a daily increase of 0.27% but a year-to-date decline of 12.4%. Christopher Watt from Bell Potter has placed a sell rating on the company, citing ongoing structural and cyclical difficulties. In fiscal year 2025, Endeavour reported retail sales of $10 billion, down 1.2%, indicating a persistent downturn in consumer spending within the retail liquor sector. This trend continued into the first seven weeks of fiscal year 2026.
Watt noted that while Endeavour is often seen as a defensive investment, its growth has stagnated. The stock has dropped significantly in recent months, falling from $4.27 on August 21 to a 52-week low of $3.45 on October 14. He concluded, “The stock looks fully valued compared to peers and lacks catalysts for a re-rating. The shares remain under pressure.”
Investors considering their positions in the ASX consumer staples sector should weigh these insights as they decide on their strategies moving forward. The current market environment, with its unique challenges, necessitates careful evaluation of potential profit-taking opportunities.
