Woolworths’ first-half profit rises 1 per cent to $979m
Australia’s leading supermarket Woolworths has reported a one per cent lift in first-half profit to $979 million this Wednesday morning, despite struggling to match food sales growth of rival Coles.
Woolworths comparable food sales grew 2.3 per cent in the half-year, below the 3.0 per cent growth reported by Coles on Tuesday.
“It was a challenging half across all of our businesses with subdued customer demand and volatile weather in the second quarter,” Woolworths chief executive Brad Banducci said on Wednesday.
The removal of single-use plastic bags and rival Coles’ Little Shop campaign, resulted in a weaker-than-expected first quarter for the supermarket giant.
While food sales improved in the second quarter, Banducci said the market remains challenging with subdued consumer demand and input cost pressures.
“While the first half was below our financial expectations, we made progress in a number of important areas and are confident that if we remain focused on our key priorities, we will continue to transform our business for the benefit of all of our stakeholders,” Banducci added.
Banducci credited the supermarket’s customer-first culture for continued strong customer metrics.
Total sales grew 2.3 per cent to $30.59 billion and EBIT increased by 1.0 per cent, with a strong underlying customer shift to online during the half.
Endeavour Drinks’ sales increased by 1.8 per cent but EBIT decreased by 6.4 per cent with Dan Murphy’s performance below expectations.
Steve Donohue was appointed interim managing director of Dan Murphy’s last month and will work on building ‘discovery’ in the customer experience and making the business digitally-led.
Earlier this week, Woolworths opted to scrap its $1-a-litre milk in support of Australian dairy farmers, sparking a debate about whether other supermarkets should follow suit.