Woolworths sales growth has slowed as it comes up against Little Shop at Coles

Katrina Wittkamp / Getty
  • September quarter food sales at Woolworths grew 1.9% to $9.9 billion with comparable sales up 1.8%
  • Growth was subdued by the Little Shop promotional campaign at Coles and disruption from the ban on single-use plastic bags.
  • The supermarket says sales have since improved.

Sales growth at Woolworths has slowed as the supermarket came up against the Little Shop promotional campaign at Coles and disruption from the ban on single-use plastic bags.

In the September quarter, Woolworths food sales grew 1.9% to $9.9 billion with comparable sales up 1.8%, well below the full year number of 4.3%.

The company says the slowing was due to impact of the removal of single-use plastic bags and a “competitor continuity program”.

Woolworths’ September quarter numbers were well below that of Coles which reported comparable food sales growth of 5.1% driven by significant growth in average customer basket size, units sold and transaction growth.

A significant factor was The Little Shop campaign which gave out free grocery miniatures collectibles for every $30 spent. They were a hit with children.

However, Woolworths reported “improved momentum” in September and into October.

“While it was a more challenging quarter for sales, customer and brand metrics were strong across the Group, especially in Australian food reflecting the underlying health of our business,” says Woolworths CEO Brad Banducci.

“In Australian Food, comparable sales momentum improved materially in September compared to August leading to growth of 1.8% for the quarter with market share by the end of the quarter broadly returning to Q4’18 levels.

“All businesses are now focused on delivering an exceptional Christmas experience for our customers.”

Average prices fell by 1% in the quarter largely driven by groceries. Fruit and vegetable prices were flat following deflation of about 10% in the previous quarter.

Banducci says BIG W continues to make progress in its turnaround with improved customer metrics and comparable sales growth in the quarter.

Total sales increased by 1.3% to $902 million with comparable sales growth of 2.2%.

The September quarter results:

Woolworths

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