Sales increased by 0.8 per cent on the previous year, excluding petrol, and decreased by 2.5 per cent, including petrol, which was impacted by changes to the Woolworths-Caltex alliance and declining fuel prices.
Australian food and liquor sales for the quarter were $11.1 billion, an increase of 0.4 per cent on the previous year. Comparable store sales for the quarter decreased by one per cent.
As part of its transformation process, Woolworths invested $100 million in the quarter to deliver on its price promise to customers. It also launched new marketing campaigns ‘Price Drop’ and ‘Low Price, ALWAYS’ to communicate its lower prices.
Improvements in key customer metrics – including NPS, value perception and service since the beginning of the year – give Woolworths confidence that its ‘Customer 1st Strategy’ will translate into improved sales momentum.
New store openings during the quarter included six supermarkets (bringing the total to 967), three Dan Murphy’s stores (bringing the total to 199) and seven BWS stores (bringing the total to 1,254, including both stand-alone and supermarket-attached stores). The 200th Dan Murphy’s store opens in Wollongong today.
“We are resetting our food business to ensure a sustainable leadership position and maintain strong returns to shareholders,” Woolworths Food Group MD Brad Banducci said. “We are focused on our strategy to get customers to put us first as we invest in price, service and loyalty.”
New Zealand supermarkets sales for the quarter were NZ$1.6 billion, an increase of 3.9 per cent on the previous year (2.4 per cent in AUD). Comparable sales increased 2.5 per cent for the quarter.
General merchandise sales were $974 million, a decrease of 7.9 per cent. Comparable sales declined by 8.1 per cent for the quarter, an improvement on the first eight weeks where comparable sales declined by 8.9 per cent.
Home improvement sales increased by 20.3 per cent during the quarter as it benefitted from new Masters store openings and the full-year contribution of stores opened over the past 12 months.
Woolworths Ltd CEO Grant O’Brien said he is pleased with the positive steps taken to transform the business, as Woolworths accelerates the pace of its change program across all of its businesses.
“At our FY15 results announcement in August, we advised that FY16 would bear the impact of our significant investment in price, service and customer experience resulting in lower margins in Australian supermarkets,” he said. “Since then, we have chosen to accelerate this investment while also absorbing significant cost inflation in categories like meat and relaunching our ‘Woolworths Rewards’ loyalty program.
“We are encouraged that our investment is being recognised by customers with a consistent improvement in key customer metrics like Net Promoter Score since the beginning of the year.”