Woolworths books 10% sales rise

Australia’s biggest retailer Woolworths has posted a 10.2% lift in third quarter sales growth.

Woolworths CEO Michael Luscombe said it continues to gain value from the solid platform created by its focus on lower costs and lower prices.

Australian food and liquor sales for the quarter were $7.6 billion – an increase of 9.3% (8.6% Easter adjusted).

Comparable store sales in food and liquor increased by 7.3% (6.7% Easter adjusted, second quarter 6%) as the company had a similarly strong sales growth the previous year of 6.6%.

Naum Onikul, director of supermarkets, said the strong momentum in the business had continued in the third quarter with further gains in market share.

“Our accelerated refurbishment program is progressing well with improvements in both sales and gross margin in the stores that we have completed,” he said.

Woolworths opened six supermarkets and six Dan Murphy stores during the quarter.

New Zealand supermarkets achieved sales of $1.1 billion for the third quarter. Comparable sales were 6.3% (6.2% Easter adjusted, second quarter 5.7%).

Peter Smith, MD of the NZ supermarket business, said significant progress had been made in reducing the price differential between the Woolworths business and the equivalent offerings from the retailer’s main competitor.

Petrol sales, including the Woolworths/Caltex alliance sites, increased by 19.7% (21.2% Easter adjusted) reflecting higher petrol prices.

During the quarter, one petrol site was closed, taking total sites to 515, including 134 alliance sites.

Big W sales grew by 13.1% (10.4% Easter adjusted). Comparable sales in the third quarter were 6.2%.

Three new stores were opened during the period taking total stores in the division to 151.

Total consumer electronics sales grew by 13.7% (16.7% Easter adjusted). Consumer electronics in Australia and New Zealand continued to enjoy solid growth, with third quarter sales increasing 8.2%. Comparable store sales in the quarter increased by 3.3% normalised for movements in exchange rates (2.8% unadjusted).

During the quarter, Woolworths opened four new stores taking total store numbers to 416.

The Indian business venture with Tata serviced 17 retail stores operating under the Croma brand. Sales in India reached $26 million in the quarter. Hotel sales in Australia increased 4.4% to $263 million.

Woolworths says it remains cautious on the extent of the impact of smoking bans over the remainder of the financial year.

Luscombe said sales from continuing operations for the full year were expected to grow in the region of 8% to 10%.

This story first appeared in Inside Retailing