Woolworths reports solid profits

Posted by Nicole Eckersley on 26th August 2010

Woolworths has reported a 10.1% increase in net profit, to a total of $2 billion, for the financial year.

Woolworths announced its positive full-year results today, among the most positive for Australia’s retail sector, despite a challenging period, as part of a focus on sustainable long-term growth.

The food and liquor Supermarket division reported a 5.1% increase in sales, of just under $1.7 billion dollars.

“Woolworths customers are benefiting from not only lower prices but from great rewards from our Everyday Rewards program, improved ranges, exclusive brands and enhanced shopping experience through our refurbishments,” read the report.

“Focus on Fresh will continue to underpin our success. We are striving to have an unbeatable fresh offer for our customers. Our success in this area, to date, has seen a strong increase in volumes with increased basket penetration.”

Woolworths said they are focused on improving the quality of their fresh food buying, working with suppliers to enhance the quality of their products, examining all aspects of their fresh supply chain to improve quality on the shelf and reduce costs, reducing shrinkage, enhancing fresh food testing, and looking for ways to improve overall quality and shelf life.

One particular area of growth identified by Woolworths was private-label or ‘exclusive brand’ goods.

“Exclusive brand expansion has continued, with performance reflecting the quality of our offer and customer acceptance,” Woolworths said.

“Growth in exclusive brands exceeds our overall performance. Our largest exclusive brand, Homebrand, is being repositioned improving both quality and presentation and continues to gain strong customer acceptance whilst still targeting our value conscious customers.”

Woolworths also mentioned the successful launch of the Macro Wholefoods Market range, and noted that exclusive brand wine sales are experiencing double digit growth and winning some wine awards.

The company also reported 5.1 million of its Everyday Rewards cards registered.

Woolworths also reported on their ‘Quantum’ business development strategy, designed to  reduce costs and improve efficiencies across all Woolworths businesses. The project will focus on all aspects of the business, inlcuding End to End supply chain, procurement, opreational work practices, global direct sourcing and increasing the efficiency of support structures.

Corporate social responsibility also rated a mention, with Woolworths reporting a ontinued reduction of carbon emissions through investment in low carbon technologies, progression on implementation of an ethical sourcing policy, and an ongoing drive to achieve best practice in safety and health performance.