Woolies Tops Coles As Rebound Continues

By Glenn Dyer | More Articles by Glenn Dyer

Woolworths wasn’t in the Confession Club on Wednesday and if it had been, the very solid third quarter sales report was very much good news, rather than bad.

The retailer says comparable (same store) third-quarter food sales rose 4.0%, again easily topping rival Coles 1.3% third quarter rise.

In its third quarter trading update issued on Wednesday, the supermarkets giant said comparable food sales at its Australian supermarkets grew to $9.57 billion for the 13 weeks to April 1 after adjusting figures for the timing of Easter.

Investors liked the result and sent the shares up nearly 1% to $27.99.

Total sales from continuing operations for the group were $14.24 billion for the 13 weeks to April 1, up 3.6% from $13.66 billion a year earlier.

That was despite another weak quarter for its struggling Big W mid level department store chain which continues to be beaten by Wesfarmer’s Kmart.

Average prices across its business fell 1.3% the latest quarter, Woolworths said in its statement, with fruit and vegetables deflation persisting at 5.4%.

“Fruit and vegetables deflation is expected to remain high in the fourth quarter as the category cycles the inflationary impact of Cyclone Debbie in the prior year," it warned.

Unadjusted Australian food sales grew 4.4%, while sales from BWS and Dan Murphy’s liquor stores grew 6.1& (Grouped as Endeavour) – and by 3.3% on an Easter- adjusted basis.

Big W reported a 1.2% Easter-adjusted decline in comparable store sales. Kmart reported a 7.7% rise on the same basis in the third quarter.

NZ comparable food sales rose 3.8% to $1.5 billion and Woolies controversial hotels and poker machines business reported 3.9% lift in comparable sales, both Easter-adjusted.

Woolworths petrol sales for the quarter of $1.2 billion were largely in line with the prior year.

Woolies CEO Brad Banducci liked the continued growth, as he naturally would.

"We are pleased with the progress we are continuing to make against our key priorities as we pivot from turnaround to transformation," Mr Banducci said in a statement on Wednesday.

"We remain energised by the number of opportunities we see to continue to improve our business."

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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