Woolworths Limited has topped expectations, growing sales by 4.2 percent on last year, or 4.8 percent excluding Woolworth’s volatile petrol division.
Woolworths Limited Chief Executive Officer, Michael Luscombe today announced full year sales across the group of $51.7 billion, a $2.1 billion increase on last year’s result.
“We are pleased to report a $2.1 billion or 4.2 percent increase in sales across the group in what has undoubtedly been a challenging year for the retail sector. Our business-wide strategy to deliver optimum value for our customers has resulted in solid sales at a time when consumers are doing it tough and tightening the purse strings. In particular, our Supermarkets Division has responded well to customer demand for value and has further enhanced its position in the market.”
Woolworth’s Australian Food and Liquor sales increased by 5.1 percent over last year, or $1.7 billion to $34.7 billion making up the bulk of Woolworths Limited sales. Inflation of prices within the food sector was modest at only 1.1 percent, or 0.7 percent excluding the effects of the Government’s increase in tobacco excise earlier this year, translating into a 4 percent increase in sales in real terms over the period.
Big W, Woolworths discount department store fared poorly, with sales down 1.7 percent to $4.2 billion. Big W’s poor performance is attributed to the winding back of Government stimulus measures which boosted spending in the previous financial year relative to this years reports.
Woolworth’s online efforts continue to improve with Woolworths developing its online business strategy across all its brands over the year. Online sales have increased by 59 percent for Woolworths over the year, with the Big W online store launching in May expected to mature into a successful online venture over the coming year.
Smaller retailers competing with Woolworths are best advised to focus on service and convenience rather than compete on price, Woolworths Limited’s brands have continued to discount stock in response to the winding back of Government stimulus and have made it prohibitive for smaller competitors to compete on price with the retail giant.