Woolworths credits teamwork for latest sales results

Woolworths has announced Group sales of $16,070 million for first quarter of the 2022 financial year, up 7.8% on the same period last year.

Woolworths Group CEO Brad Banducci says this has arguably been the most challenging Covid quarter for the Woolworths business, with the Delta variant causing major disruptions to its supply chains and stores, especially in NSW and Victoria.

“Prolonged lockdown restrictions … in the quarter saw customers continue to consume more at home. This benefitted our food business with Australian Food sales growth of 3.9%,” he says.

“On the other hand, BIG W sales declined by 17.5% due to store closures and trading restrictions, as well as cycling growth of 20.4% in Q1 F21.”

Group eCommerce sales growth was again strong, with record sales penetration of 12.4%.

Covid costs

Group Covid costs increased to 0.6% due to additional hygiene, testing, team and supply chain costs.

Since the Delta outbreak began, over 22,000 team members have had to isolate and Woolworths Group had over 1500 exposure sites across its network.

Mr Banducci says it has been a “better together” team effort across Woolworth Group.

“Our team has been working both tirelessly and with agility to ensure our customers have access to food and everyday essentials,” he says.

“BIG W team members have assisted in Woolworths Supermarkets; our Commercial, Replenishment and Primary Connect teams have constantly been rebalancing stock across our various East Coast distribution centres to ensure we keep our stores in stock; and our digital and store teams have continues to work together to create ever more convenient solutions and meet elevated customer demand.”

Australian Food

Total Australian Food sales for the quarter increased to $12.3 billion. Woolworths Retail sales increased by 3.7%, benefitting from higher in-home consumption driven by extended Covid lockdowns in NSW and Victoria, the roll out of additional e-commerce capacity, and the successful Woolworths Bricks collectibles campaign.

Woolworths Supermarkets (store-originated) sales for the quarter were $10.6 billion, down 0.6% (+1.4% excluding tobacco), impacted by lockdowns resulting in some customers shifting to e-commerce.

Metro Food Stores sales for the quarter increased 8.7% to $256 million, driven by new store growth and strong sales in neighbourhood stores with city and transit stores continuing to be negatively impacted by reduced foot traffic.

Comparable transactions declined 6.8% but were more than offset by growth in items per basket of 10.0%, with customers continuing to shop less frequently, but with larger baskets.

During the quarter, six new stores were opened, including five Woolworths Supermarkets and one Metro store, with 10 renewals completed. A second Australian eStore was opened, located in Maroochydore, Queensland. Six Metro stores in metropolitan locations remain temporarily closed. At the end of the quarter, there were 1001 Supermarkets and 79 Metro Food Stores, with a total fleet of 1080 stores.

Outlook

October sales to date have slowed in Australian Food as NSW lockdown restrictions have eased. In contrast, BIG W sales trends have improved as greater Sydney stores reopen.

Given recent closures and restrictions, BIG W’s results will be even more dependent this year on the Christmas trading period, says Mr Banducci.

“As we look ahead, we will continue to prioritise the health, safety and wellbeing of our team and customers. The Vaccination Roadmap announced last week is an example of this commitment,” he says.

“Our focus is now firmly on Christmas and the festive season more broadly. While the outlook remains uncertain, and there are likely to be challenges in the weeks ahead, we are excited about helping our customers celebrate a much-needed festive season in an inspirational, safe and enjoyable way.”

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