Woolworths has managed to hold its sales steady in the third quarter, with the supermarket giant settling in for several years rebuilding and reinvestment.
In revealing its latest of results, Woolworths' highlighted that its food and liquor sales for the quarter hit $10.7 billion, and increase of 0.4% on the previous year. However the sales across the peak Easter period failed to move the dial, with the adjusted comparable sales for the period declining 0.9% for the quarter.
When this is compared to rival Coles, for the same reporting period, the Wesfarmers owned supermakets managed to boost same store sales by almost 5%, by using cost cutting methods on key items. However similar cost cutting efforts made by Woolworths have failed to have any real effect.
The business is in its first year of a three to five year plan to restore its lost sales momentum, with CEO of the business, Brad Banducci outlining: “Getting our customers to put us first is our priority and good progress has been made on delivering better prices and improved service to our customers.
“We are also embedding a customer and store team culture across our group,” he added.
Banducci also explained that the sales performance in Australian supermarkets continues to be impacted by high levels of deflation, which has been caused by the businesses investment in price. He added however “We are encouraged that customers are starting to notice the improvements we are making. It will be a three to five year journey to rebuild supermarkets, but we are confident we are on the right track.”
Woolworths has also commenced a group wide review across all aspects of the business, with the company also adopting a new operating model, with Banducci outlining this model is designed to “move accountability to into the individual businesses, as well as renewing our corporate and shared service functions to ensure they are organised to best support these businesses.”
When it comes to other aspects of Woolworths business, Petrol sales for the quarter were $1.1 billion, however this was 8.8% below the prior year, with this being impacted by a 8.1% reduction in the average fuel sell prices.
One area of the business that did see growth was Masters, with its sales for the quarter jumping 30% on the previous year to $282 million. This positive news comes after the announcement at the beginning of the year that Woolies was ditching the embattled home improvement retailer.
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