Woolworths reports robust sales, maintains guidance

Posted by Daniel Palmer on 20th October 2009

Australia’s largest supermarket operator has again posted strong sales growth in the first quarter and has reiterated its forecast for the full year.

Food and liquor sales again led the way, rising 7.8 per cent, or 5.8 per cent on a comparable store sales basis, while the group’s overall sales growth reached 4.2 per cent – hurt considerably by lower petrol prices (7.4% ex. petrol).

Food inflation was a more restrained 2.1 per cent in the quarter compared to last year’s 3.2 per cent.

“This sales result is a solid start to the financial year reflecting our continued focus and investment to deliver value and enhance the customer experience,” Chief Executive Michael Luscombe said.

The company added that the robust sales at their supermarkets had been assisted by the roll-out of the 2010c format store and the commencement of an alliance with the Qantas Frequent Flyer loyalty program.

“(Due to the impact of macro-economic factors), consumer confidence levels and therefore spending are very difficult to predict for the FY10 year,” Mr Luscombe advised. “Subject to the uncertainty these factors create, we maintain our sales outlook for the full year where we expect sales to grow in the upper single digits (excluding petrol sales).”

Woolworths shares were down one per cent on the news.