Woolworths has regained its sales momentum in its most important business – its Australian supermarkets and liquor business after seeing it disappear as the previous board and senior managers became distracted by the multi-billion dollar losses from the Masters hardware adventure.
Total sales from continuing business (which excludes the petrol stations) across the Woolworths group rose $513 million or 3.7% from the same period last year to $14.5 billion.
Woolies said in its first quarter trading update yesterday that comparable store sales growth was 4.9% in the first three months of the 2017-18 financial year (top line sales were up 4.7% to $9.6 billion for its food businesses).
That compares to comparable food sales growth of 0.3% at Coles for the same period, its parent, Wesfarmers revealed last week. The news saw the company’s shares rise 2.3% to $25.88 – and that rise accounted for most of the 2.6% rise last month.
Liquor sales at Woolworths’ Endeavour Drinks (its BWS and Dan Murphy’s chains) grew 3.8% to $2 billion in the first quarter – up 3.3% in same store terms, which strips out the impact of opening or closing stores.
Woolworths said it was able to post the sales growth despite 2.4% price deflation on groceries during the quarter (Wesfarmers put its food price deflation at 2.3%).
Sales were buoyed by 4.6% transaction growth and shoppers buying more at each visit to its supermarkets, leading to volume growth of 6%, Woolworths said yesterday.
"We have continued the good sales momentum from the second half of FY17 and made pleasing progress against our key priorities over the quarter," Woolworths group chief executive Brad Banducci said in a statement.
"While we are pleased with the progress during the quarter, there remains much more to do with our focus now firmly on the important Christmas trading period."
In NZ, supermarket sales rose 3.2% (and 2.7% in same store terms) to $NZ1.627 billion 0 up $NZ50 million from a year ago.
And Woolworths said there were signs of improvement at its biggest headache – the struggling Big W discount department store chain which reported sales growth for the first time for well over a year and a half.
Total sales were up 2.5% to $890 million compared to the same period last year, when they fell 5%. Comparable sales were up 2.1% which is even more encouraging for Woolies management.
The retailer said the improvement was driven by the launch of new range of low-priced private label products, which had been well received by shoppers.
"While it is still early days in our turnaround journey, the first key element in our plan was to regain price trust with our customers," Woolworths said.
