Woolworths’ New Zealand business is the only brand in the group to have recorded a sales decline in the Australian parent company’s third-quarter results.

With the Woolworths Group recording $22.1 billion in sales for the quarter (AU$18.1 billion), all of its Australian divisions grew year on year. But the results showed the New Zealand business fell by 5.2 per cent.

The group said this slowing performance was due to the country’s “highly competitive market with discounters benefitting from a flight to value”.

“While New Zealand Food’s transformation will continue in H2 (second-half of the fiscal year), progress will be slower than previously anticipated with lower sales growth, higher fuel costs, and store operating model disruption.”

Average prices for the quarter were up by 0.5 per cent on the prior year, Woolworths said, adding that its on-demand e-commerce sales – deliveries fulfilled within two hours – increased by 25 per cent.

The future success of the group, however, was met with caution as CEO Amanda Bardwell spoke on the ongoing impact of the Middle East conflict.

“We are seeing early signs that the conflict in the Middle East is impacting our customers and team, many of whom were already experiencing significant cost-of-living pressures,” Bardwell said.

“Our primary focus since March has been to take the necessary steps across the group to minimise the impact on customers, while also recognising the genuine cost pressures being felt by our suppliers and transport partners.” 

In Australia, Woolworths’ supermarkets announced a price freeze on 300 of its own-brand, household “essentials”. It plans to keep this offer in place for the next three months.