Woolworths Group’s New Zealand supermarket business saw lower earnings as the company continued to struggle with higher wage costs and weak consumer demand.

The supermarket chain’s New Zealand food business booked earnings before interest and taxes of $108 million, plunging 56.5 per cent.

This is despite the segment’s sales growing 3.2 per cent to $8.17 billion.

“While it will take time for New Zealand Food to get back to the returns we believe the business should deliver, we are optimistic that the multi-year transformation plan is improving the underlying performance of the business,” said Brad Banducci, Woolworths Group CEO, in the Australian-listed company’s results briefing.

In Australia, the company’s Big W department store EBIT fell by 90.4 per cent to A$14 million, with sales declining 2.1 per cent to A$4.69 billion.

Woolworths Group’s overall net profit plummeted 93.3 per cent to A$108 million after incurring significant items of A$1.6 billion related to the impairment of its New Zealand supermarket business and mark-to-market of the investment in Endeavour Group.

The group’s revenue rose 5.6 per cent to A$67.92 billion.