Woolworths has released Q3 results for the 13 weeks to 1 April 2018, with sales up 4.3% to AU$14,244m and positive growth across all continuing operations.
Australian Food up 4.7% to AU$9,571m
Like-for-like (LFL) sales increased 4.4%, benefiting from the shift in the timing of Easter compared to the previous year. Woolworths Voice of the Customer metrics continued to show that shoppers are enjoying improvements made to availability, the fruit and vegetables offer, as well as lower prices, with prices declining 1.3% in the period. Woolworths also attributed strong event activity around Easter, Valentines and its Earn & Learn programme, as a key contributor to growth. The retailer also maintained a strong focus on improving its network, with one new Metro opening, two supermarket closures, six major store renewals and 20 upgrades in Q3.
Endeavour Drinks up 6.9% to AU$2,004m
LFL sales grew 6.1% (3.3% Easter adjusted), with both BWS and Dan Murphy's performing above overall market performance. The warm weather helped drive sales, however it also impacted the category mix with beer sales benefiting more than wine. Diuring the period store numbers across both banners remained flat, with two new BWS stores opening and two closing.
Online sales benefiting from investment
Online sales continue to fly, with food sales growing c.30% and liquor sales up over 20%. The national roll out of Pick Up at all supermarkets has been a significant contributor, alongside other strategic digital initiatives. Whilst the introduction of Express Delivery at 319 BWS stores by the end of the quarter was called out as another positive.
New Zealand Food up 3.4% to NZ$1,633m
LFL sales grew 3.5% despite average prices declining 1.1% due primarily to the lowering of prices, with 4,000 products now in its Price Down campaign. Growth was attributed to investment in team hours in-store, improved fruit and vegetables and online, with a strong increase in Pick Up sales. The retailer also rolled out enhanced customer-led ranging to 80 stores, tailoring the range to the local demographics. Two Countdown stores were closed in Q3.
On track for a strong 2018
Woolworths remains on course to deliver an impressive 2018 set of results, with the Big W and Hotels segments of the business also seeing growth of 3.2% and 3.3% respectively in Q3. Alongside the initiatives called out for driving growth, Woolworths is on track to have rolled out its 1Store programme by the end of June, improving POS, centralised ticketing and next generation back office software for supermarkets and BWS. Online sales growth is also likely to remain strong, with two further customer fulfillment centres commisioned in Q3 and the increased Pick up network promoting more customers to test the channel.