Woolworths sales top $59 billion

Glenda Kwek
July 30, 2013
The Age

Woolworths’ sales for the year to June 30 have risen 4.3 per cent to $59.16 billion, despite weak consumer confidence and low inflation.

The supermarket chain said its transformation program had been “rewarded with a strong sales result”.

“Momentum continues to increase in Australian Food and Liquor with comparable sales growth for the second half higher than the first half and the prior year,” Woolworths chief executive Grant O’Brien said.

Woolworths shares fell as much as 4 per cent on the release of the sales result. The shares dipped to $32.41 before recovering to a loss of 2.9 per cent, or $32.78.

The firm said Australian food and liquor sales increased 6.6 per cent for the 2013 financial year to $40.03 billion. It’s New Zealand supermarkets division lifted by 6.9 per cent, while its petrol division rose by 1.2 per cent.

Big W saw sales grow by 4.9 per cent and the home improvement division by 49.6 per cent. Its hotels division soared by 22 per cent for the year.

Earlier this month, Woolworths forecast bigger losses for its hardware chain Masters. It forecast Masters to record earnings before interest and taxes for 2013 financial year to rise to a pre-tax loss of $157 million.

CBA retail analyst Andrew McLennan said the fall in Woolworths’ share price this morning following the release of its full-year sales results could in part be a reaction to the weak Big W figures.

Mr McLennan said the Big W figures had been hit by poor weather, which in turn affected clothing sales.

But he said the food and liquor sales results were fine.

“We know the market was quite a bit weaker in the fourth quarter. The fact that they haven’t fallen by too much compared to the third quarter is a reasonable outcome,” Mr McLennan said.

“However, they are talking about deflation accelerating a little bit, so clearly any of the bulls on the supermarket stocks that were thinking inflation is coming back is going to be [disappointed].”

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