Woolworths supermarket first quarter sales well up

Posted by AFN Staff Writers on 18th October 2012

Woolworths Limited today announced good first quarter sales from continuing operations in their supermarket and liquor division in Australia, with figures up 4.6 per cent over the corresponding period last year. The Woolworths quarterly report said that its 4.6 per cent increase was well above “comparable store sales for the quarter [which had] increased 2.3%.”

The increase in sales from $12,564 Million in the first quarter of 2012 to the equivalent period in 2013 to $12,993 Million was attributed to an increase in Woolworths’ market share, customer numbers and items sold.

Sales growth was also attributed to new Western Australian Sunday trade (7 days a week shopping in Western Australia) which commenced at the end of August 2012, the return of produce inflation, as well as a range of national promotions including  ‘Extra Specials’, ‘Sticky Specials’ and ‘Lamb Cuts for Less’ promotions.

Despite strong sales growth figures, average prices were in deflation for the quarter of 2.8 per cent when the effects of promotions and volumes were included. Woolworths attributed the deflation results to “customers taking advantage of the fact that Woolworths continues to lower its prices for their benefit.”


Woolworths  supermarket sales in New Zealand

New Zealand supermarket sales were also up for the first quarter despite difficult economic conditions in the area. The supermarket sales were up 2.7 per cent from $1,420 Million NZ in the first quarter of 2012 to $1,458 NZ in the first quarter of 2013.

Managing Director PEL Supermarkets, Dave Chambers, said that New Zealand supermarkets reported particularly strong sales in seafood and grocery sectors, attributed to “increased promotional effectiveness.” Deflation was reported in dairy and dry grocery areas.

“Despite the ongoing challenging economic conditions and the impact of competitor new store activity, during the quarter, we continued to grow market share, customer numbers, basket size and items sold,” Mr Chambers said.

Two additional franchise stores were opened, bringing the total to 56 New Zealand supermarket stores at the end of the quarter.


Overall results for Woolworths Limited

Overall the Woolworths group sales amounted to $15.2 Billion for the quarter, an increase of 4.3 per cent on the previous year’s figure of $14.5 Billion. Strong sales were evident in the supermarket and liquor division in Australia and New Zealand, as well as hotel divisions, BIG W, and home improvement divisions.

CEO Grant O’Brien said that online sales had increased by 30 per cent for the quarter.

“This was a pleasing start to the year with momentum created towards the end of the last financial year continuing through the first quarter. While we have made progress against our strategic priorities, there is still a great deal to do in our business transformation programs,” Mr O’Brien said.

Woolworths opened eight Australian supermarkets during the quarter bringing the national supermarket total to 879, and six new Dan Murphy’s took the total to 165.


Woolworths petrol sales

Petrol sales for the quarter, including Woolworths/Caltex alliance sites were at $1.7 billion, a decrease

of 1.5%. Average fuel sell prices were 139.6 cpl (Q1’12: 140.0 cpl). Comparable sales (dollars) decreased by 3.7%. Petrol volumes decreased 2.4% for the quarter and comparable volumes decreased 4.4%.

Volumes were impacted by a flat fuel market and the move towards more fuel efficient vehicles, including the shift towards diesel, as well as increased competitor activity.

Total merchandise (non-fuel) sales increased 5.4% for the quarter and comparable merchandise (non-fuel) sales increased 0.6% for the quarter. Woolworths opened six petrol canopies during the quarter bringing the total to 604, including 131 Woolworths/Caltex alliance sites.


BIG W sales

BIG W sales for the quarter were $1.1 billion, an increase of 6.2% on the previous year.

Comparable store sales for the quarter increased 3.4% driven by a continued improvement in customer numbers and items sold. Selling more units to more customers has offset the continued impact of deflation resulting in the average basket size being flat relative to the prior year. Deflation for the quarter was approximately 6%.

Julie Coates, Director of BIG W said: “We are pleased with the improving trends in our business following improved marketing and new range offerings. Marketing has been refocused with the new brand campaign ‘Everyone’s a Winner with Australia’s Lowest Prices’ and ‘Cha-Ching’ which was launched in July 2012.

Customers have responded well to new and innovative products and brands, including the launch of Michelle Bridges and Guy Leech active wear and we have strengthened our high volume value program across apparel.

The impact of the Government assistance programs were temporary and only appeared to have an impact in the first few weeks of July.”

Woolworths opened one new store during the quarter, bringing the total to 173 with plans to open a further three stores before Christmas this year.


Woolworths owned hotel sales

Hotel sales for the quarter were $379 million, an increase of 17.3% on the previous year.

Comparable sales increased 7.3% for the quarter, reflecting continuing growth in food and bar sales as well as an increase in gaming comparable sales in line with expectations mainly as a result of the Victorian gaming regulatory changes which came into effect on 16 August 2012.

Bruce Mathieson Jnr, Chief Executive Officer ALH Group said: “We have had a good start to FY13 which included an impact on sales from the changes to the Victorian gaming legislation. In addition, we acquired 32 new sites and our management team have been busy integrating these into our business.

We are pleased with the performance of our new hotels and the integration to date.”

We opened 32 hotels during the quarter. We also closed one hotel, with a total of 325 venues at the end of the quarter.


Home Improvement sales

Home Improvement sales increased 62.2% to $305 million for the quarter. This result includes sales from the first 22 Masters stores, seven of which opened during the quarter.

Don Stallings, Chief Executive Officer Home Improvement said: “The result for Q1 is pleasing with a particularly strong response to our new ‘I made it with Masters’ brand campaign which was launched in September and our ‘Ultimate Dad Shed’ catalogue.

We have also continued to see an increase in online sales with a greater product range as well as growing brand awareness.”