Coles Group Ltd (ASX:COL) shares surged 5.01% in intraday trading on Friday following the release of a long-awaited report by the Australian Competition and Consumer Commission (ACCC) on the supermarket sector. The report's findings and recommendations were perceived as less severe than anticipated, alleviating investor concerns about potential harsh regulatory measures.

The ACCC's inquiry, which spanned over a year, found that while Coles, Woolworths, and ALDI are among the most profitable supermarket businesses globally, there was no clear evidence of price gouging. The report outlined 20 recommendations aimed at improving transparency, enhancing competition, and creating fairer conditions for suppliers and consumers. Notably, the recommendations were described as "benign" by analysts, with no calls for aggressive reforms such as enforced price controls or forced divestitures.

Investors reacted positively to the report's findings, interpreting them as a reduced risk to the supermarket giants' business models. The absence of recommendations for strict regulatory interventions sparked a rally in the consumer staples sector, with Coles and its main competitor Woolworths both experiencing significant gains. The market's response suggests that the outcome of the ACCC inquiry was more favorable than expected for the major supermarket chains, potentially allowing them to maintain their strong market positions while addressing concerns through less disruptive measures.