Woolworths' plastic bag ban has slowed sales, says CEO Brad Banducci

Lilly Vitorovich
August 20 2018
AFR
Retail giant Woolworths has posted a 12.5 per cent jump in annual net profit but has signalled that supermarket sales in the new financial year have come under pressure by the removal of single-use plastic bags.
Chief executive Brad Banducci said sales first seven weeks of 2018-19 slowed as customers adjusted to the removal of single-use plastic bags even as rival Coles backflipped and continued to offer free bags, as well as due to falling prices for meat, fruit and vegetables.
“We expect sales momentum to improve over the course of the half (year) and are confident that we have strong plans in place to be ‘consistently good’ at the fundamentals and drive further shopping differentiation relative to our competitors,” Mr Banducci said in the group’s results statement.
Net profit for the 52 weeks ended June 24 rose to $1.72 billion, driven by renewed demand for its extensive food offerings and new stores, while sales were up 3.4 per cent from a year earlier to $56.73 billion.
The group’s Australian Food unit – which consists of nearly 1000 Woolworths-branded supermarkets booked annual comparable sales growth of 4.3 per cent, the “strongest sales growth in a number of years”, Mr Banducci said.
In New Zealand, its supermarket operations are delivering “strong core sales momentum” following investments over the last two years, he added.
The company expects ongoing progress from its budget department store chain BIG W in 2018-19, with a further reduction in losses likely.
“However, financial performance will continue to be driven by the key Christmas trading period,” Mr Banducci said.
Woolworths will pay a final dividend of 50 cents a share, unchanged from a year earlier, plus a special dividend of 10 cents a share.
AAP