Woolworths has released Q1 results with sales up 1.9% to AU$14,853m.
Australian Food sales up 1.9% to AU$9,870m
Food sales slowed in the quarter, particularly at the start of the period when Woolworths removed single use plastic bags from its stores and changed the phasing of promotional activity from the previous year. Despite this, customer metrics and LFL sales remained strong, tracking 1.8% for the quarter - camparible to those released by Coles. Average prices declined 1.0% in the quarter, with the retailer adding c.260 items to its Always and Dropped price campaigns. This means that over 5,000 items are now included in these schemes. The retailer continued to improve its network, opening three net new stores and renewing 15 in the quarter.
Woolies X sales up 25.6% to AU$343m
Woolworths has split out its Woolies X sales for the first time in its results - the sector of the business that overseas online food sales and loyalty activity. Online penetration reached 3.3%, up from 2.7% in the same period last year, driven by the increasing availability and popularity of Pick Up, improved online experiences and customer engagement via digital channels. During Q1 the business has also trialled an ultra-convenient delivery service in Sydney and Melbourne, scan and go tehcnology at Double Bay in Sydney and relaunched the Woolworths app. Woolworths Reward customers continued to increase, with improvements in direct marketing capability and personalised offers for customers.
Endeavour Drinks sales up 3.0% to AU$2,101m
LFL liquor sales grew 1.7% with both Dan Murphy's and BWS delivering positive momentum. The slowdown in sales was attribited to an overall softening market, in wihich Woolworths is the market leader. Online liquor sales continued to see double-digit growth, with 472 BWS stores now online enabled and 7% of Dan Murphy's sales now via the channel (50% delivered and 50% Pick Up).
New Zealand Food sales up 2.6% to NZ$1,679m
Price deflation of 1.8% during the quarter and store closures caused a drag on performance. Despite this LFL sales grew at 4.0%, with strong sales in infant formula milk and customers responding to ongoing price activity, with over 4,400 items now in the Price Down campaign. Online sales grew 40%, with strong growth in Pick Up and Countdown X further establishing itself as a dedicated business unit.
Despite slowdown, outlook remains positive
Woolworths Group CEO, Brad Banducci, said, “While it was a more challenging quarter for sales, customer and brand metrics were strong across the Group, especially in Australian Food reflecting the underlying health of our business. All businesses are now focused on delivering an exceptional Christmas experience for our customers.”