Woolworths total group sales increased by 3.7% on the prior year with Group EBIT declining by 14.2%. This was largely driven by a decline in Australian Food EBIT of 12.8%, which Woolworths Group attributes to the 17 days of industrial action “disrupting the flow of stock into stores and homes”, and “value-seeking customer behaviour”.
“The performance in the half was below our expectations with a combination of rapidly changing customer behaviours and significant disruption,” said Woolworths Group Chair, Scott Perkins.
“We are focused on addressing these challenges and under our new CEO, Amanda Bardwell, we have a clear set of priorities for 2025.”
Food sales
Australian Food total sales increased by 2.7% to $26.7 billion in H1 with solid trading momentum in Q1 somewhat offset by the supply chain disruption driven by industrial action in Q2. Excluding the one-off impacts of industrial action, incremental supply chain commissioning and dual running costs, Woolworths estimates, H1 sales would have increased by approximately 3.7% and EBIT would have declined by approximately 5% due to price and promotional investment and ongoing inflation in wage and other costs.
Woolworths Food Retail sales increased by 2.5% (3.8% excluding tobacco) driven by solid item growth, particularly in long life categories despite disruptions due to industrial action in Q2.
“The team has worked incredibly hard to recover from the supply chain disruptions caused by industrial action in November and December,” said Ms Bardwell.
“While we acknowledge the material impact of the industrial action on our customers and team, we came to an agreement that is fair and sustainable and enables ongoing productivity improvements critical to maintaining competitiveness. In Victoria, sales have not yet fully recovered but availability and customer metrics are returning to pre-disruption levels with ongoing efforts to regain customers.”
Online sales were also impacted by industrial action in H1; however, overall growth remained strong at 20% with convenience propositions like Same Day, Direct to Boot Now and MILKRUN driving growth. Orders fulfilled under two hours now represent 31% of eCommerce sales, more than double the prior year and enabled through a large store network in close proximity to customers.
Value-seeking shoppers
Outside of the industrial action disruption, customer transactions continued to grow during the half but items per basket declined as rates of cross-shopping increased during the year reflecting cost-of-living pressures and more choices for customers.
Own and Exclusive Brand sales grew 5.2% in H1, ahead of overall sales growth as customers continued to shift purchases to lower priced items. Long Life Own Brand sales were particularly strong with 7.1% growth driven by Pantry, Frozen Foods, Snacking and Household Care.
A focus on value for customers contributed to average prices in Q2 declining by 0.4% compared to the prior year, the fourth consecutive quarter of lower prices. During the half, more than 3,800 products were on Everyday Low Price and Lower Summer Price programs. Members also unlocked savings through the Bank for Christmas offer and enhancements to the Everyday Rewards app making it easier for members to earn points and unlock more value.
“While we continue to optimise our promotional activity, cost-of-living pressures for customers persist with value-seeking behaviours and cross-shopping expected to continue,” Ms Bardwell said.
Customer engagement
Weekly average traffic to Woolworths Group digital platforms reached 31.9 million in Q2, up 9.9% on the prior year, driven by increased traffic to the Woolworths and Everyday Rewards apps. Weekly average traffic to Food and Everyday digital platforms reached 20.7 million in Q2, up 8.6% on the prior year with Woolworths app users increasing by 32.7% in H1. A new digital tool, Watchlist, was launched to enable customers to save their favourite products and be notified when these are on special.
Cartology revenue increased by 15.3% with strong growth across the portfolio. Highlights for the half include the completion of the Vicinity rollout, delivery of video ad units on the woolworths.com.au homepage and continued growth in digital channels.
Everyday Rewards & Services platform sales increased 9.8% in the half. Everyday Rewards active members reached 10.2 million, with approximately 340,000 net active members joining the program during the half. Member engagement remains strong with weekly active app users now over 2.2 million and scan and tag rates increasing by approximately 2.5 and 2.3 points respectively on the prior year.
Outlook
Woolworths reported Australian Food Retail sales growth of 3.3% in the first seven weeks of H2 F25, driven by a more stable trading environment following the recovery from industrial action, cycling lower growth in the prior year, a collectibles program and ongoing eCommerce growth.
Ms Bardwell outlined three clear priorities for the group in 2025:
- Get it right for our customers – improving price perception, rebuilding trust and optimising range
- Simplify the way we work – including the recently announced new organisational structure
- Unlock the full potential of the group – ensuring that all parts of the Group can contribute to growth and returns within a reasonable time frame.
“We have a passionate and talented team, a leading store network and eCommerce business, a modern supply chain, a leading Rewards program and analytics capabilities, many growth options and a solid financial position,” she said. “This gives me confidence that we can deliver for our customers and team and create long-term shareholder value.”
Ms Bardwell also commented on the pending release of ACCC’s Supermarkets inquiry final report.
“We have assisted the ACCC throughout its inquiry and will carefully review the report,” she said. “Our day-to-day experience is that the Australian grocery sector is highly competitive, and that customers have many choices about where to shop. We understand that despite low and stable food inflation, cost-of-living concerns persist for customers. We remain focused on providing value and getting it right for all of our stakeholders.”