Woolworths to court younger shoppers in bid to entice more families

WOOLWORTHS chief Brad Banducci says prices will ­remain “unbelievably competitive” as the group’s namesake grocer steps up its charm ­offensive to draw back more young families.

WOOLWORTHS chief Brad Banducci says prices will ­remain “unbelievably competitive” as the group’s namesake grocer steps up its charm ­offensive to draw back more young families.

The retail heavyweight on Friday revealed its net profit soared more than a third in the 27 weeks to December 31, compared with the same period a year earlier, to $969 million.

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It came as like-for-like sales, which strip out the impact of shops that have opened or closed, jumped 4.9 per cent across the half.

In the second quarter, covering the three months to December, they surged 5.1 per cent — comprehensively outpacing the 1.4 per cent growth rate at arch rival Coles.

Mr Banducci said competition from rivals, including German chain Aldi, was strong, and Woolworths would continue to bolster its offering to win back young families.

“We have work to do with young families and that is a particular opportunity for us,” he said.

Mr Banducci said the loss of that demographic dated back “quite a long time”.

Woolworths had traditionally been “overindexed” among young families, and the “under-indexing happened ­before my time”, he said.

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Woolworths wants to bolster its offerings to win back young families. Picture: AAP

The grocer was determined to win them back, he said.

Mr Banducci said the group had to build “price trust” for the “big basket” young families — those typically buying many goods each visit.

It was important that when those customers “spend $150 on shopping, they know they are going to get a great price for the overall shop”, he said.

Mr Banducci said the group had a program to capture the attention of those looking for low prices on key items, and there had been an uptick in young families shopping at its supermarkets.

Despite strong competition, Woolworths was balancing the interests of shoppers and ­investors well, he said.

Woolworths chief executive Brad Banducci. Picture: Aaron Francis

“It is a very competitive market, so we of course need to work very hard on the customer. But we are also sensitive to our expectations of our investors,” he said.

The group declared a fully-franked interim dividend of 43c, up 9c from a year ago.

Woolworths began cutting food prices to win a bigger market share in 2015, spending about $1 billion over two years on the cuts and on initiatives to improve customer service.

Across the past half, group revenue rose 3.8 per cent to $30 billion.

That growth was driven by the pick-up in grocery sales, and growth in turnover at liquor chains Dan Murphy’s and BWS, as well as the group’s hotel and poker machines arm.

Woolworths shares nonetheless fell 2.6 per cent to $26.92 on Friday.

Citi equities sales director Karen Jorritsma said the market was concerned that the cost of doing business at Woolworths was outpacing revenue growth. “The market is a bit caught on where Woolworths will go in terms of operating margin,” Ms Jorritsma said.

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with AAP