Woolworths NZ’s food sales up amid lower fresh produce prices

(Source: Bigstock)

Supermarket chain Woolworths posted higher sales in the fiscal first quarter, with New Zealand food sales enjoying item growth and strong e-commerce performance.

The trans-Tasman group’s sales went up 4.5 per cent to A$18 billion (NZ$19.78 billion) with its New Zealand food sales segment growing 2.7 per cent to NZ$2.12 billion.

The company noted higher Fresh and Long Life sales, thanks to the launch of the ‘Fresh Food Feeling’ brand platform in the fiscal third quarter in the prior year and its Disney collectibles campaign.

Woolworths added that average prices fell 2.1 per cent with the largest reductions seen in fruits and vegetables, attributed to improved supply in key lines such as sweet potato, pumpkin, lettuce, onions, and brassica amid favourable growing conditions.

During the quarter, 10 Countdown stores in New Zealand were rebranded to Woolworths, taking the number of rebranded stores to 82.

“The transformation of the business continues to gather momentum but trading conditions in New Zealand are expected to remain muted,” said Amanda Bardwell, Woolworths CEO.

Meanwhile, Australian food sales increased 3.8 per cent to A$13.6 billion while Australian B2B sales rose 6.9 per cent to A$1.47 billion.

W Living jumped 17 per cent to A$1.36 billion, reflecting its acquisition of Petstock and Big W declining 0.9 per cent.

The company’s ‘Other’ segment – which includes revenue from Quantium – rose 5.8 per cent to A$58 million.

For the fiscal first half, the company expects earnings before interest and taxes (EBIT) of between A$1.48 billion and A$1.53 billion, down from $1.59 billion in the year-ago period. The reduction – in part – is the result of consumers migrating from shopping at physical stores to online, which is a more expensive channel to operate.

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