There’s been a wave of uncertainty for Australian grocer, Coles (ASX:COL), among analysts at Jefferies, Citi and Morningstar.

This doubt comes following the company’s annual report where it disclosed disappointing results.

Coles, the second largest grocery chain in Australia, posted a decrease in profits on Tuesday due to escalating costs, subsequently causing its share value to decrease significantly.

Jefferies predicts that operational costs, including the implementation of the Witron & Ocado project, will pose a larger challenge for the company in the upcoming year.

Compounding this, the firm anticipates issues like higher operational costs, reduced property EBIT and an increase in net interest to impact Coles' performance negatively.

Concurring with Jefferies' assessment, Morningstar predicts a weak earnings growth from ongoing operations in the near term due to factors like weak volume growth, a decrease in shelf price inflation and increasing labour costs.

Citi, however, forecasts a total supermarket cost growth of about 8% in FY24.

Despite the disappointing results, Citi remains hopeful that the rebased consensus earnings expectations can be exceeded if there are positive cost management surprises and benefits from the Witron project in FY25.

As of its last close, Coles' stock price has suffered a 4.3% decrease this year.

Coles is Australia’s second-largest grocery chain with a significant presence across the country.