Forget Coles shares, I’d buy this roaring retailer instead

Coles Group Ltd (ASX: COL) shares closed 2.38% higher on Monday afternoon, at $21.53 a piece. The latest gain puts the supermarket giant’s share price 5.28% higher over the past six months and 14.46% above where the shares were trading this time last year.

The Coles share price spiked in late August and early September on the back of a robust FY25 result. It also posted a strong quarterly update in late October, where it reported a 3.9% increase in group sales and quarterly results generally in line with analyst expectations. 

Overall, Coles was a strong performer in 2025, and it appears that its growth strategy has paid off. But the business continues to face headwinds from resilient inflation and cost-of-living pressures in Australia.

Consumers are being forced to cut back on discretionary items, and even Coles’ executives have noted that shoppers are visiting more stores and being more selective. And this could be problematic for business growth in 2026.

Analysts are mostly bullish about the outlook for Coles shares in 2026. TradingView data shows that 10 out of 16 analysts have a buy or strong buy rating on the stock with a maximum 12-month target price of $26.60. That implies that Coles shares could jump another 23.55% this year, at the time of writing.

The company’s growth and anticipated share price increases are attractive, but I have my eye on another roaring ASX retailer, which I think is an even better buy for growth this year.

Another ASX retailer set to rocket in 2026

Metcash Ltd (ASX: MTS) is a wholesale distribution and marketing company that specialises in food, liquor, and hardware. Unlike the supermarket giant, Coles, Metcash supplies and supports independent retailers in Australia.

For example, its supermarket segment supplies more than 1600 stores, including the IGA and Foodland brands. Meanwhile, its liquor operations supply more than 90% of independently owned bottle shops, including the Bottle-O and Cellarbrations brands, as well as pubs. 

Metcash’s hardware division is the second-largest supplier in Australia, servicing more than 700 Mitre 10, Home Timber & Hardware, and Total Tools stores across metropolitan and regional Australia. 

At the close of the ASX on Monday afternoon, Metcash shares were down 0.30% to $3.30 each. Over the past six months, the retailer’s shares have declined 17.91%, but they remain 7.14% above their level at this time last year.

Metcash shares suffered a huge 15% crash in late November following the company’s FY26 half-year results, but analysts seem to be confident that the business can turn it around for 2026.

Metcash is a fantastic defensive asset, and while I don’t think we’ll see explosive numbers this year, I do think we’ll see consistent growth over the next 12 months, which will outpace the likes of Coles.

TradingView data shows that 9 out of 13 analysts have a buy or strong buy rating on Metcash shares, with a maximum target price of $4.70. That implies the shares could increase by 42.42% from the current share price.

The post Forget Coles shares, I’d buy this roaring retailer instead appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.