Woolworths has reported a 3.9 percent Australian food and liquor first quarter sales growth on the previous year.
Woolworths said sales were below expectations, with trading softer in August and September. Growth was impacted by differences in the timing of promotional activities and the cycling of higher fuel discount activity.
There was a deflation in average prices of 2.0% for the quarter (Q4’14: deflation of 1.7%) when the effects of promotions and volumes are included. The standard shelf price movement index which excludes investment in promotional activity increased 4.6% for the quarter (Q4’14: 3.5%), impacted by the increase in tobacco excise and produce inflation resulting from tightened supply conditions.
Tjeerd Jegen, Managing Director of Australian Supermarkets and Petrol said: “We relaunched ‘The Fresh Food People’ in August and have continued to focus on being the first choice for Fresh food. In line with our strategy, Fresh sales for the quarter grew faster than Grocery. We have also extended our ‘Farmers’ Own’ milk range to Western Australia in partnership with Margaret River dairy farmers. Our Grocery business remains a key focus and we are confident our trading plans for the second quarter will deliver on the many opportunities.”
Brad Banducci, Managing Director of Liquor said: “The Liquor market continues to be subdued, in particular the Beer and Ready-To-Drink categories, with trading remaining highly competitive.
“During the quarter we continued to experience strong growth in Dan Murphy’s Online and launched ‘Dan Murphy’s Connections’…We also launched the BWS ‘200 Specials’ campaign which we expect to build on in the second quarter.”
Woolworths opened nine (net) Australian Supermarkets during the quarter bringing the total to 940, three (net) Dan Murphy’s bringing the total to 189 and six (net) BWS stores bringing the total to 1,222 (including both standalone and supermarket attached BWS stores).
Woolworths’ chief executive officer, Grant O’Brien said “While first quarter sales were lower than expected, we are confident that our trading plans will improve momentum in the second quarter which includes the key Christmas period.”
Coles’ 2015 first quarter retail sales results indicated a food and liquor sales growth 5.8 percent, but still fell short of Woolworths with $7.3 billion.