Woolworths has broken out of its flat sales growth loop, overtaking its main competitor Coles.
In its latest quarterly report to April 2, food sales rose 5.1% to $9.27 billion.
Comparable sales increased by 3.9%. On an Easter-adjusted basis, total sales increased by 5.6% and comparable sales grew by 4.5%.
Here’s the detail on third quarter sales:
The result is a contrast to Coles, owned by Wesfarmers, whose latest quarterly numbers showed a further slowing in sales growth, due in part to more competition for Australia’s grocery dollar.
Coles announced headline food and liquor sales up 1.2% to $7.6 billion. Comparable food and liquor sales for the three months increased just 0.3% and comparable food sales were 0.4% for the quarter.
Both Coles and Woolworths are under attack from discount players including the German chain Aldi which had been making inroads into the eastern states market.
Woolworths CEO Brad Banducci says the company is still in the early stages of our turnaround.
“We are pleased with the progress we have made on our key priorities with the strong sales growth in Australian Food during the quarter a particular highlight,” he says.
However, results for the first half of 2017 will reflect the financial impact of higher investment in key areas, cost price increases and the company’s response to competition.
In the quarter, average prices fell by 2.5%.
Online sales grew by about 20%.
Big W sales for the quarter fell 8.6% to $757 million.
“Big W is a work in progress and its turnaround will be a multi-year journey,” says Banducci.
He expects the division to report a loss before interest and tax of $115 million to 135 million for the second half of 2017.