Woolworths Group continues to make ‘good progress’

Woolworths Group sales increased by 3.4 per cent to just under $60 billion for FY19.

According to Woolworths Group CEO Brad Banducci, the company made “good progress” on its transformation across all of its businesses in FY19 with improving sales and EBIT momentum in the second half of the year.

“Customer scores improved in the fourth quarter while sales and EBIT momentum improved in the second half,” he said.

“Normalised FY19 group sales from continuing operations increased by 3.4 per cent and EBIT by five per cent with second half sales and EBIT growth of 4.7 per cent and 10 per cent respectively.

“A number of landmark transactions for the group were completed or have commenced in the last 12 months.

“The sale of petrol was finalised in April with the proceeds of $1.7 billion returned to shareholders through a share buy-back. In July, we announced our intention to merge Endeavour Drinks and ALH, to be followed by a demerger or value-accretive alternative in calendar year 2020.”

Australian Food

The Australian food business ended FY19 with “good momentum”, says Mr Banducci, after slower growth in in the first half of the year.

“H2 comparable sales increased by 3.9 per cent resulting in full year comparable sales of 3.1 per cent,” he said.

“Normalised EBIT increased 3.8 per cent for the year. Comparable sales growth for the first eight weeks of F20 has been strong at approximately 7.5 per cent reflecting lower sales growth in the prior year and the success of the Lion King collectables program.

“On a two-year average basis, comparable sales growth is approximately 4.5 per cent. Sales growth is expected to moderate over the course of the financial year.”

Woolworths supermarkets

Store-controllable voice of customer (VOC) was 82 per cent, in line with the prior year. It was, however, up two points on March with VOC NPS (which includes online) improving to 51 in June compared to 47 in March and 48 in June 2018.

“The resilience in our customer scores is pleasing given the removal of single-use plastic bags, the impact of the drought on fresh availability and quality, and significant operational change in the business,” Mr Banducci said.

“We made good progress in a number of areas including our fresh agenda, range localisation, and delivered exciting new renewals including our first smart store in Gregory Hills [Sydney].”

Own Brands

Own Brands delivered “solid growth”, says Mr Banducci, with double-digit growth in Macro and free-from.

Metro

Metro, according to Mr Banducci continues to perform “strongly” and delivered high single-digit sales growth.

By the end of FY19, there were 43 Metro branded stores which included new formats in Kirribilli and Rozelle, NSW.

WooliesX

WooliesX had another strong year, says Mr Banducci, with online sales growth in Australian food of 31 per cent (normalised).

Mr Banducci claims that this is the case because the retailer provided its customers with new ways to shop. This included further scaling-up pick up, growing drive (112 drive ups and drive thrus at the end of the year) and launching on-demand (Delivery Now live in 38 stores).

“In August, we announced a partnership with Takeoff Technologies to roll out three micro fulfilment centres over the next 12 months to better service our customers’ needs for same-day delivery and make the picking process simpler and quicker for our teams,” Mr Banducci said.

Woolworths Rewards

Woolworths Rewards membership reached 11.7 million.

According to Mr Banducci, there are now more ways for customers to earn Rewards points.

Addressing community and sustainability

Woolworths also made “important progress” on its Group community and sustainability agenda during the year, Mr Banducci says, with:

  • The phase-out of single-use plastic bags from all Woolworths Group businesses, on both sides of the Tasman. Mr Banducci claims there is approximately three billion fewer plastic bags in circulation because of this, equating to a 4,700-tonne reduction in single-use plastics over the course of the year.
  • The transition away from $1 per litre milk pricing and the introduction of the Drought Relief Milk range. Mr Banducci says this has delivered $19 million in relief to more than 450 dairy farmers since September 2018 in support of the sustainability of the dairy industry and impacted regional communities.
  • Woolworths Group being the first retailer in Australia and first supermarket globally to issue Green Bonds certified by the Climate Bonds Initiative in support of its efforts to reduce its environmental impact for the communities it serves.

Check Also

Woolworths launches drought action appeal with charities

Woolworths is doing its bit to help support communities that are experiencing some of the …