Woolworths focus on ‘customer experience’ as Q3 shows solid sales
Australian supermarket giant Woolworths Limited will continue to focus on improving value within its stores, after announcing third quarter sales of $14.4 billion to the end of March 2013. The result is an increase of 5.7 per cent on the same period last year, or 5.2 per cent after adjusting for the impact of an earlier Easter.
“The momentum of the first half has continued into this quarter as a result of sharpened focus on our core businesses and early results from work on our strategic priorities,” said Grant O’Brien, Woolworths CEO.
Woolworths’ growth over the last twelve months, which has increased with each quarter’s results, has led to the suggestion from analysts that Woolworths is successfully ‘closing the gap’ in the growth rates measures against its rival, Coles.
But Mr O’Brien acknowledged that there is still some way to go in improving Woolworths’ sales figures.
“While this progress is pleasing, there is still a lot more work to do in transforming our business,” said Mr O’Brien. “We remain focused on improving this growth while enhancing the shopping experience of our customers and building a solid platform for the future,” he said.
Food and Liquor
Australian Food and Liquor sales increased by $0.5 billion, or 5.6 per cent on the previous year (4.9 per cent when adjusted for Easter). Woolworths said it continued to increase its market share, customer numbers, basket size and items sold when compared to the same period last year, and that it was pleased with Easter trading in March 2013.
Strong supermarket performance
Woolworths said the sales results are a result of the investment it has made in ‘customer engagement’, and reflect customer approval of the way the supermarket group is using the insights it has on customers’ needs.
“Customers are responding to the targeted offers we can make by having a more advanced understanding of the range, value and convenience they need to meet the challenges of their increasingly busy lives and tighter family budgets,” said Mr O’Brien. “We are finding that customers feel empowered by the options we can provide them by being open to new ways of delivering value,” he said.
Woolworths rival, Coles, is due to publish its 2012-13 third quarter results this week.
The discount department store chain delivered a solid sales result, despite the ongoing deflation experienced by the business. Sales for the 2012-13 third quarter increased 3.4 per cent on the same period in 2012, or 1.8 per cent when adjusted for Easter.
The sales increase was “driven by the success of a continued focus on our customer offer and successful new store openings,” said Mr O’Brien.
Hotel sales during the 2012-13 third quarter grew by 19.7 per cent, or 20.5 per cent when adjusted for Easter.
Woolworths said the sales increase was driven by acquisitions during the first half of the 2012-13 financial year, as well as changes to the Victorian gaming regulations, which came into effect in August 2012.
Woolworths’ Home Improvement sector continued to expand in the 2012-13 third quarter, with the opening of an additional four Masters stores during the quarter, as well as the launch of the Masters app.
“While conditions in the trade segment remain challenging, we continue to be pleased by the progress of this business,” said Mr O’Brien.
Online sales increased 36 per cent for the third quarter. Woolworths said the growth reflected the success of its multi-option strategies and ongoing changes to customer shopping preferences.