Woolworths sales gain 5 percent over previous year

Posted by AFN Staff Writers on 31st January 2012

Woolworths Limited today announced first half year sales of $29.7 billion, a 5 percent increase on the previous year.

CEO Grant O’Brien said, “The first half year result was solid considering the ongoing headwinds facing the retail sector with subdued consumer confidence and significant deflation along with the change agenda we are driving through our business”.

He also stated that the first half year result includes a 5.6 percent growth for the supermarket division, an overall customer increase, reflecting improved customer buying power through price deflation.

Food and Liquor financial results

Woolworths’ Australian food and liquor division had sales for the half year of $19.6 billion, an increase $0.8 billion or 4.3 percent, over last year. Sales for the second quarter were $9.9 billion, an increase of 4.1 percent over the last year equivalent period.

Comparable store sales in the Woolworths’ Australian Food and Liquor division for the half year increased 1.5 percent and for the second quarter increased by 1.1 percent.

Sales growth was impacted in the second quarter by significant deflation particularly in produce, seafood and deli. Produce deflation was experienced in all months of the quarter, and by December 2011 it was a double digit. Woolworths continued to invest in price, particularly in grocery and liquor categories. Sales growth also dampened in the second quarter by cooler weather with the lowest December wide temperatures since 2001. The impact was greatest in lines such as soft drinks, ice cream, and deli items including salads, cold meats and roast chickens.

Tjeerd Jegen, Director of the company’s Supermarkets and Petrol division, said, “The trading environment has remained tough, with continuing deflation across key product categories combined with a continued cautious consumer. However we increased market share, customer numbers, basket size and items sold. During the half year, we served on average 19.3 million customers per week.”

The standard shelf price movement index for the half year was 0.9 percent and for the second quarter -0.3 percent. This was impacted by produce prices which were affected for the first quarter by the natural disasters early in 2011. However, they were in significant deflation in the second quarter as supply improved.

Woolworths Australia’s supermarket division, particularly its Australian Food and Liquor sales, sit at $12,685 million for the second quarter (13 weeks), in 2011. Comparatively in the 2010 second quarter, its Australian Food and liquor division had sales were $12,025 million. This was a 5.5 percent increase on the previous year’s sales summary for the second quarter.