Woolies’ sales stronger, but fall short of Coles’ growth

Jon Condon, 29/08/2014

The nation’s largest retailer delivered comparable store sales growth of 3.1 percent for the financial year ended June 30, however the figure fell short of Coles’ growth figure announced recently.

wooliesDelivering full year financials to the market today, Woolworths’ food and liquor division recorded 2013-14 sales of $41.2 billion, with pre-tax earnings of $3.28 billion, up 9.1pc.

The company’s supermarket division operations was one of the company’s highlights, delivering higher margins last year, which offset bigger than expected losses from Woolworths’ Masters home improvement division and weaker earnings at Big W.

Woolworths chief executive Grant O’Brien said the consolidated company’s net profit rise of 6.1pc on an adjusted basis demonstrated that key strategies adopted four years ago were delivering strong, sustainable growth in established parts of the business.

“At the same time we are investing in opportunities to generate growth into the future,” he said.

“We’ve increased comparable sales and pre-tax earnings in Australian Food and Liquor over the past three years, gaining further momentum in the year just completed,” he said.

“In a highly competitive market with ongoing consumer uncertainty, we have increased market share while also delivering value to customers who have saved more than $750 million from key promotional campaigns throughout the year and benefited from deflation in average prices of 3.1pc for the year.”

Australian food and liquor division recorded comparable sales up 3.1pc for the year, with growth stronger than the prior year as customers have responded to increased value and an improved offer.

Comparable sales for the fourth quarter increased 3.3pc (Coles last week recorded an equivalent figure of 4.1pc), despite more challenging trading conditions and increased consumer caution.

During the year, Woolworths supermarkets increased market share, customer numbers, basket size, items sold and sales per average square metre. It served on average 21.1 million customers per week, an increase of 3.7pc on the previous year.

Customers continued to benefit from lower average prices as reflected by deflation of 3.1pc.

A range of innovative brand programs produced strong customer uptake of red meat products sold under the ‘Created with Jamie’, ‘Free-from’ and Woolworths ‘Gold’ own brands. The ‘Macro’ brand range also continues to expand, proving to be popular with customers, and now covers 400 ‘healthy’ products in stores.

In terms of real estate, Woolworths has grown its supermarket store numbers to 931 during the year, up 34 from 897 a year earlier.

In the company’s hotel division, many of which include steakhouses selling Woolworths’ controversial non-MSA ‘Graziers’ branded beef, the number of hotels has expanded by four to a total number of 329 venues.

“Woolworths is adding to its market share through a more aggressive program of store openings, while Coles continues to win the ‘1000-year war’ over like-for-like store sales growth,” analyst Richard Gluyas said in today’s The Australian.

Online sales grow 50pc

Overall company online sales reached $1.2 billion for the financial year, increasing by 50pc on the previous 12 months, reinforcing Woolworths claims to being Australasia’s largest domestic online retailer. Within the company’s supermarket division, online sales grew 40pc last year. There are now more than three million online-ordered supermarket items delivered to customers each week.

“Our online offers in Australian Food and Liquor continue to exceed our expectations,” Mr O’Brien said.

Woolworths recently opened Australia’s first full-range dedicated online grocery store and expanded its ‘Click & Collect’ network to 202 stores, offering same-day collection service, including 17 drive-thrus.

The company has introduced a number of digital features to make shopping easier for customers, including ‘Track My Order’ GPS functionality, providing the ability to share shopping lists and allowing customers to locate any product in store.





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