Woolworths saw total sales fall $49 million when compared with the previous year, amid rebuilding and reinvesting across the group.
“Getting our customers to put us first is our priority and good progress has been made on delivering better prices and improved service to our customers,” Woolworths Ltd Group CEO Brad Banducci said. “We are also embedding a customer and store team culture across our group.”
Australian food and liquor sales for the quarter were $10.7 billion, growth of 0.4 per cent on the corresponding quarter in 2015. When adjusted for Easter, sales declined 0.9 per cent. According to Woolworths, increased customer transactions were offset by lower prices and items per basket, while Woolworths’ customer satisfaction index, Voice of the Customer, was steady. Woolworths has spent more than $400 million since quarter two of financial year 2015 in lowering prices, while increasing staffing numbers on Saturdays. In the quarter, one new supermarket was opened, while three Thomas Dux stores were closed, bringing nationwide totals to 977 supermarkets and six Thomas Dux stores.
“The sales performance in Australian supermarkets continues to be impacted by high levels of deflation, predominantly from our price investment,” Mr Banducci said. “It will be a three- to five-year journey to rebuild Woolworths supermarkets, but we are confident we are on the right track.”
In liquor, Dan Murphy’s continued to perform strongly, with a record high Net Promoter Score in March, despite price competition in a market largely focused on wine. BWS continued to record positive comparable store growth.
Petrol sales for the Woolworths group for the quarter were $1.1 billion, down 8.8 per cent on the comparable quarter the previous year. This was mainly due to an 8.1 per cent fall in the average fuel sell price. Easter adjusted comparable sales saw a fall of 10.9 per cent. According to Woolworths, the growth in premium and diesel fuel sales was offset by the fall in sales in lower grade and LPG. Comparable volumes, which were 3.2 per cent lower, were impacted by a significant number of competitor canopy openings, despite competitive pricing. Two new canopies were opened in the period, bringing the total number in Australia to 523.
In other departments, general merchandising saw a decrease in sales of 4.5 per cent Easter adjusted when compared with the previous year, while hotel sales fell 0.7 per cent.
“We have commenced a group-wide review across all aspects of our business,” Mr Banducci said. “We are also adopting a new operating model designed to move accountability into the individual businesses as well as reviewing our corporate and shared service functions to ensure they are organised to best support these businesses.”