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Woolies Q1 sales show strong growth

Woolworths4Woolworths Group has continued its supermarket momentum in the first quarter of fiscal 18, booking strong growth well ahead of Wesfarmers’ owned chain Coles.

Woolworths Australian Food sales increased by 4.7 per cent to $9.63 billion during the 14 weeks ended 1 October, while comparable store growth was 4.9 per cent.

This compares well to Coles’ 1.5 per cent increase in food and liquor sales reported to the market last week, but is slightly lower than Citi’s forecast of 5.1 per cent comparable growth.

Total sales from continuing operations were up 3.7 per cent to $14.52 billion on growth in all divisions. Endeavour Drinks sales increased by 3.8 per cent to $2.04 billion, while comparable store growth was 3.3 per cent, underpinned by a strong performance at BWS. Woolworths Group chief Brad Banducci provided no specific guidance, but said the team is “energised and excited” moving into the Christmas trading period.

“We are also conscious of the changing needs of our customers who are looking for increasing levels of convenience and we are working hard to meet this need, with Pick up one of the many initiatives we have underway,” he said. “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.”

Woolworths said average prices declined by 2.4 per cent during the first quarter on material reductions in fruit and vegetable prices compared to the prior corresponding period (pcp), which was also called out by Coles boss John Durkan last week.

Prices declined 1.2 per cent excluding those categories, with around 290 products added to its ‘price dropped’ and ‘always’ (EDLP) program since the end of FY17, bringing the total to 3,800. Australian Food recorded comparable transaction growth of 4.6 per cent in the quarter, comparable items per basket growth of 1.4 per cent and comparable item growth of 6 per cent.

Supermarket customer feedback scores indicate an overall satisfaction rate of 79 per cent, while store specific metrics indicate an 83 per cent score, up four per cent on last year. Woolworths now has 1,003 supermarkets, with eight supermarkets opened during the quarter, including three metro conversions, as well as 7 renewals and 11 upgrades to existing locations.

Endeavour Drinks launched a one-hour pickup service at BWS during the quarter, while Dan Murphy’s online continues to deliver double-digit growth. Petrol sales increased by 4.6 per cent during the quarter to $1.2 billion, driven by a 7 per cent increase in average fuel sell prices. Comparable sales across its 532 sites increased by 3 per cent, while comparable volumes were down 2.7 per cent.

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