Woolworths beats rival Coles for the sixth-consecutive time in food sales figures
WOOLWORTHS has outpaced rival Coles for the sixth consecutive trading update as it funnels more shoppers through its check-outs and continues to cut prices, albeit at a lower rate.
Business
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WOOLWORTHS has outpaced rival Coles for the sixth consecutive trading update as it funnels more shoppers through its check-outs and continues to cut prices, albeit at a lower rate.
Food sales rose 4.7 per cent to $9.57 billion for the 13 weeks to April 1 compared to the same period a year earlier, the nation’s biggest supermarket chain said on Wednesday.
Like-for-like sales came in at 4 per cent, well ahead of the 1.3 per cent like-for-like sales growth Coles posted for the same period last week.
The like-for-like number is closely watched by investors as it strips out the impact of stores opening and closing.
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Woolworths said its food prices were 1.3 per cent lower for the quarter compared to the same period a year earlier.
Coles posted price deflation — the rate at which shelf prices are falling — of 0.7 per cent but its number also includes liquor sales.
Woolworths chief executive Brad Banducci said the supermarket giant was shifting from a turnaround phase to a transformation one.
“We remain energised by the number of opportunities we see to continue to improve our business,” Mr Banducci said on Wednesday.
The latest trading updates from the supermarket chains add to the signs they are taking their foot off the price-cutting pedal despite repeated denials there had been any change in strategy.
Woolworths’ latest price deflation number of 1.3 per cent is down from a more aggressive 2.4 per cent it recorded for the first three months of the financial year.
The rate at which Coles is lowering prices has eased from 2.9 per cent in the first three months of the year to 0.7 per cent in the three months to March.
Morgan Stanley analyst Tom Kierath said “benign levels of supermarket industry competition” and a strong focus on shelf availability and service had helped Woolworths deliver a “solid” result.
“But as Coles becomes independent and Kaufland’s Australian entry increases in focus, we see competition increasing in 2019,” Mr Kierath.
Wesfarmers is working to spin off Coles into a separate company trading on the stock exchange, while German grocery interloper Kaufland has so far secured sites for its massive stores in Melbourne and Adelaide.
Total sales at Woolworths Group — which takes in liquor retailers BWS and Dan Murphy’s, discount department store chain Big W and pokies operator The Australian Leisure and Hospitality Group — rose 4.3 per cent to $14.2 billion.
Discount department store chain Big W reported a 1.2 per cent decline in like-for-like sales, with an increase in items per basket being offset by lower prices.
Big W is expected to post a full-year loss of between $80 million and $120 million.
“The BIG W turnaround is still a work in progress,” Mr Banducci said.
Shares in Woolworths on Wednesday closed 0.9 per cent higher at $27.99.
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