Woolworths sales growth lifts off the bottom

Photo by Guang Niu/Getty Images

Woolworths has for the first time in almost a year lifted underlying sales growth.

The supermarket group today announced its quarterly sales, showing Australian food sales up 1.7% to $9.321 billion.

Comparable sales growth for the 14 weeks to October 2 was 0.7%, beating analyst expectations of 0.3% to 0.4%.

The result was still behind main competitor Coles which this week reported a rise in headline sales of 2.9% to $7.9 billion for the quarter.

However, the result is an improvement on the full year results for Woolworths when food sales were down 0.2% to $34.79 million.

The company says “higher customer satisfaction scores” are translating into improved sales momentum.

Intense competition, driven by discount players such as Aldi, is still being felt on supermarket shelves.

Average prices fell by 1.9% driven by cuts in groceries and bakery compared to the same quarter last year. Average prices, excluding tobacco, were down 2.8%.

Woolworths opened two supermarkets and closed three for a total of 991 supermarkets.

“We made good progress during the quarter on our five key priorities and are seeing far more consistency in our trading performance in Australian Food,” says CEO Brad Banducci.

“Customers continue to respond to the improvements we are making, with Australian food delivering its first positive comparable sales growth since Q2’15, despite ongoing material price deflation.

“While we are pleased with our progress, there remains much more to do. Our trading performance over the key Christmas trading period is crucial to the financial performance of the Woolworths Group.”

Petrol sales were down 11% to $1.2 billion, impacted by a 13.9% fall in average fuel prices.

Endeavour Drinks sales increased 3.8% to $2 billion. Comparable sales were up by 1.8%.

BIG W sales were down 5.5% to $880 million.

The quarterly results in detail:

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