Trans-Tasman retail group Woolworths continued its strong FY20 trading into the beginning of the new fiscal year, delivering first-quarter sales growth of 12.3 per cent to A$17.9 billion, with online sales up 86.7 per cent at $1.5 billion.
In New Zealand, the company’s Countdown business saw sales grow 6.9 per cent during the quarter to NZ$1.8 billion, while online sales rose 50.5 per cent to NZ$224 million.
Sales growth was primarily driven by items-per-basket growth, and the quarter saw a third dedicated e-commerce fulfilment centre in Wellington and introduced in-app online shopping – helping push online grocery sales.
A “short-lived sales increase” occurred in August when a number of new Covid-19 cases were reported in New Zealand, likely as panicked Kiwis stocked up for a potential second wave, but growth quickly returned to normal.
As New Zealand was in lockdown for a portion of the quarter, no new stores were opened.
With Christmas just 50 days away the group is anticipating a “very different” holiday season ahead, but aims to deliver the opportunity for customers to enjoy the spirit of the holiday in a Covid-safe way.
“It has been a pleasing start to FY21, with all retail businesses delivering strong sales growth and customer metrics remaining solid,” said Woolworths Group CEO Brad Banducci.
“Covid costs remain material as we continue to prioritise the safety of our customers and team but have moderated as we become more efficient at operating Covidsafe.”
The cost of running Covidsafe businesses has decreased over time for Woolies, now only making up 1 per cent on sales, compared to 2 per cent in the fourth quarter of the last trading year.
In Australia, the business’ supermarkets saw sales in-store grow 9.2 per cent on the same time last year to A$10.6 billion, while online sales doubled to $961 million.
However, the group’s compact Metro stores saw a decline of 5.1 per cent to $235 million as CBD foot traffic continued to be below average.
“Freestanding and neighborhood stores continue to outperform with sales growth in major shopping malls and city locations still impacted by customer preferences to shop locally,” the business said.
Discount department store Big W saw substantial growth during the quarter, driven by bigger basket sizes of leisure and toy purchases, with sales up 20.4 per cent to $1.1 billion.
Online sales were up 175 per cent to $104 million, due to the fact stores in Melbourne were transitioned to fulfil home deliveries and pick up services, as well as the launch of Big WX – a team within Big W that will focus on online, and collaborate with Woolies X, Countdown X and Endeavor X.