Woolworths sales ‘solid’ on back of bargain-hunting Aussies

Australia’s largest supermarket chain announced a “solid” third-quarter update on the back of selling cheaper items.

Discounted items and bargain-hunting Aussies helped lift Woolworths’ food sales, but cost-of-living pressures remain for customers, Australia’s largest supermarket says.

During an announcement to the ASX, Woolworths chief executive Amanda Bardwell said food sales were “solid” despite moderating inflation, adverse weather conditions and industrial actions in the prior quarter.

Woolworths said Easter-adjusted sales in the quarter increased by 3.6 per cent to $13.05bn on the back of an increase in promotional uptake by customers and growth in lower-priced items.

The supermarket boss claimed Australians were still facing pressures at the checkout.

“Cost of living remains a concern for customers; however, customer scores were largely stable during the quarter and sales growth rates improved modestly across the group,” Ms Bardwell said.

Woolworths has announced “solid” third-quarter sales. Picture: NewsWire / Monique Harmer

Average prices in Woolworths’ food retail operations, excluding tobacco, fell 0.5 per cent from a year earlier, marking a fifth consecutive quarterly decline.

This comes as customers continue to look for cheaper or discounted items when shopping, dragging the average price of goods lower.

The supermarket also flagged the impact of floods in Queensland and Northern NSW during the quarter that it estimated added up to $25m in additional costs from increased stock losses, higher transportation expenses and damage to its Hervey Bay supermarket.

“I would like to recognise the incredible efforts of our team to support weather-affected parts of Queensland and Northern NSW during the period,” Ms Bardwell said.

“This included airlifting essential items into Ingham and other communities isolated by floodwaters as well as the donation of groceries and essential items to local evacuation centres.”

Woolworths’ Coolangatta supermarket was stripped bare of essentials due to Cyclone Alfred. Picture: NewsWire / Glen Campbell 

But Woolworths Group’s Big W division is heading for a $70m loss for the second half.

The company said clothing remained a challenge, with Q3 growth reliant on clearances of spring and summer clothing, while it announced a slower start for its autumn/winter range.

The business’s play division growth was driven by toys due to everyday low pricing and continued strong momentum in own brand (Somersault), which offset declines in gaming, office stationery and books.

In a similar story, Coles chief executive Leah Weckert on Wednesday said the supermarket giant’s sales data for the three months until the end of March showed customers had cut back on treats, including lollies, alcohol, reduced their meat intake and ditching bottled water.

She also said customers were looking for heavily discounted stock to buy when on their weekly shop.

“Our most popular and well-performing specials would be the ones that are 40 to 50 per cent off,” Ms Weckert said.

“We have announced big promotions that are really relevant to customers instead of lots of small ones.”

Originally published as Woolworths sales ‘solid’ on back of bargain-hunting Aussies