Woolworths reports big sales growth

Woolworths Limited has reported a huge first quarter, boosted by its supermarket and liquor dominance in the Australian market.

Sales in the period were up almost 5 per cent from the same period last year, and above “comparable store sales for the quarter [which had] increased 2.3%.”

From last year’s first quarter sales of $12 564 million, this year the group saw $12 993 in sales in the same period, attributed to an increase in the supermarket giant’s market share and increased consumer numbers and sole items.

The recent commencement of Sunday trading in Western Australia, which began at the end of August this year, has also been a contributing factor the increased sales.

While sales were up, Woolworths reported a fall of almost 3 per cent in average prices, which it says is resulting in “customers taking advantage of the fact that Woolworths continues to lower its prices for their benefit.”

But while the price of a number of items may be down for the average shopper, many don’t understand the impact of the price war on the food industry and its future.

Food manufacturers and producers are going out of business and struggling to make ends meet as they find it impossible to compete with cheap imports.

But experts have warned that the prices are unsustainable, as once the Australian dollar goes back down, prices of imports will increase and there will be fewer Australian companies able to provide food.

Woolworths opened eight Australian supermarkets during the quarter, meaning they now have 879 throughout the country, while the opening of six new Dan Murphy’s took the total to 165.

Smaller retailers have criticised the supermarket giant’s determination to continue opening new stores, saying they are opening larger than necessary outlets in a deliberate bid to wipe out competition.

Overall, the Woolworths group sales increased more than 4 per cent in the quarter, bringing it up to $15.2 billion for the quarter.

Chief executive Grant O’Brien said online sales had increased by 30 per cent for the quarter.

“This was a pleasing start to the year with momentum created towards the end of the last financial year continuing through the first quarter,” he said.

“While we have made progress against our strategic priorities, there is still a great deal to do in our business transformation programs.”

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