Woolworths Group’s New Zealand grocery business achieved an 8.5 per cent increase in sales during the third quarter to $2.018 billion, despite the impact of Cyclone Gabrielle on the supply chain.
While inflation drove much of the increase, the company said comp sales rose by 6.8 per cent.
Severe flooding events in January and February saw eight Countdown stores and three SuperValue franchises closed temporarily due to flooding, IT issues, and power outages. Woolworths says online deliveries were materially interrupted during February, as well.
Online sales fell by 8.1 per cent during the quarter as more consumers shopped in stores compared with the same period a year earlier when Covid disrupted normal trading.
According to the supermarket operator, average grocery prices during the third quarter rose by 9.5 per cent year on year, with inflation of fresh food prices reaching double digits.
During the quarter, one new store opened in Timaru North, and one renewal was completed in Mairangi Bay, which had been damaged by flooding in January. Two stores were closed in the South Island.
Groupwide, trans-Tasman sales rise
The Australian-listed company reported an 8 per cent increase in group-wide sales during the third quarter to A$16.338 billion.
That’s marginally ahead of Australia’s 7 per cent inflation rate during the same three months but higher growth than archrival Coles reported last week at 6.5 per cent.
Woolworths Group CEO, Brad Banducci, said customer spending levels were stable during the quarter “however value-conscious customers are becoming more thoughtful about their discretionary spend, trading into more affordable options such as our own brands and looking for additional ways to save in-store or through our digital, rewards and e-commerce platforms”.
Australian food sales rose 7.6 per cent, while Sales at Big W grew by 5.7 per cent, growth impacted by a slow start to seasonal apparel sales ahead of winter.
Woolworths Group’s star performer seems to have been its B2B arm, where its PFD wholesale business achieved a 28 per cent increase, underpinning a 16.4 per cent increase division-wide.
Banducci said a slow recovery of supply chains had seen improved availability of stock in the food division “but customers are concerned about the impact of ongoing inflation on household budgets”.
Sales to date in the fourth quarter have been in line with the third with “solid sales growth in our food businesses and growth moderating in Big W,” he said.
“Looking ahead, we’re seeing signs of overall inflation moderate in food. However, in many areas, inflation remains frustratingly elevated and we need to continue to work hard to provide our customers with great value across their shopping basket.”
The company will focus on “affordable protein”, its own and exclusive brands, seasonal price promotions and personalised Everyday Rewards offers to members.
“Our current focus is on continuing to improve our customer experience, especially value for money and product availability, and we remain cautiously optimistic that Woolworths Group is well placed to navigate and respond to the current trading challenges successfully for all key stakeholders – our customers, our team, our suppliers and community partners, and our shareholders,” he concluded.
