Wednesday, June 19, 2024

Woolworths releases 2023 half year results

Woolworths has released its 2023 half year results, with Group sales increasing 4% to $33.2 billion.

Across its Australian Food division, sales increased 2.5% in the half to $24.4 billion (3-yr CAGR: 5.5%) driven by an increase in Woolworths food retail sales of 2.4% (3-yr CAGR: 5.4%).

“Our first half result benefitted from a focus on improving our customer shopping experience, restoring our operating rhythm, the non-recurrence of material Covid costs in the prior year and strong seasonal trading,” says Woolworths Group CEO Brad Banducci.

He acknowledges that cost-of-living pressures are being felt by Woolworths’ customers due to industry-wide inflation and says helping them get their “Woolies worth remains our number one priority”.

Supermarkets

Woolworths supermarkets sales for the half were $21.3 billion, an increase of 3.2% (4.7% excluding tobacco). B2C e-commerce, however, decreased 7.5% to $2.4 billion as customers returned to shopping in store following “elevated” e-commerce sales during the prior year lockdowns.

Delivering value for customers remains a priority through Woolworth’s Get your Woolies worth campaign platform, says the retailer.

During the half, this included reducing the price of over 400 spring staples and 150 Christmas essentials as part of the seasonal Prices Dropped programs. For Christmas, Woolworths held the ‘Same price or less than 2021’ on a selection of Christmas table classics in addition to its Low Price Freeze during H1 which contributed to the “strong” seasonal trading period.

Metro

Metro food stores sales were $574 million, an increase of 17.4%. This, says Woolworths, was supported by new store growth, a “gradual recovery” in on-the-go stores and “enhancements” to the Neighbourhood format.

Own brand

Woolworths’ Own and Exclusive brand sales grew 1.9% with sales growth impacted by availability issues in vegetables and meat.

It, however, benefitted from the Low Price Freeze campaign on a range of almost 200 own brand products throughout the half.

Inflation

Average prices in the second quarter increased by 7.7% compared to prior year, slightly higher than the 7.3% growth in the first quarter.

In fresh, commodity price increases in poultry and dairy products contributed to average price increases.

Fruit and vegetable inflation “moderated somewhat” in the second quarter relative to the first quarter as supply conditions improved.

In long life, inflation was mainly driven by supplier cost price increases.

Stores

During the half, eight net new stores were opened, 25 renewals were completed and 16 Mini Woolies opened.

At the end of the half, the total fleet comprised 1003 Woolworths supermarkets, 90 Metro food stores, seven CFCs, two eStores, 700 DTB sites and 31 Mini Woolies.

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