Woolworths posts 5.3pc rise in Q1 sales as fresh veggie prices fall

afr.com:

Woolworths Group posted a 5.3 per cent gain in first quarter sales to $17.2 billion, with inflation in the food businesses moderating, driven mainly by falling prices in fresh produce and meat.

The nation’s largest supermarket chain’s sales over the first eight weeks of the first quarter of 2023-24 were up 6.5 per cent year-on-year, but growth in the balance of the quarter slowed.

In the Australian food division, sales increased 6.4 per cent to $13.1 billion with higher item growth offset by a moderation in inflation. At Woolworths supermarkets comparable sales increased 5.5 per cent (or 6.8 per cent excluding tobacco).

Woolworths Group CEO Brad Banducci said average prices in the first quarter increased 2 per cent due to deflation in fruit & vegetables and meat. 

“Customer trends remain broadly in line with the prior quarter with overall demand resilient; however, we are seeing our customers, particularly our saver families and young singles and couples, ever more focused on value in all forms which has impacted our customer scores,” chief executive Brad Banducci said.

Woolworths’ own and exclusive brand sales grew 7.8 per cent and by category, pantry, household care and milk, cream and cheese were particularly strong. Deflation in fruit and vegetables and meat resulted in average prices increasing only 2 per cent compared to the prior year period.

Average prices for fruit & vegetables fell by 12 per cent due to improved growing conditions with berries, lettuce, cucumbers, capsicum and tomatoes all declining materially.

E-commerce sales increased 18.4 per cent and Cartology media sales, including Shopper Media, improved by 28 per cent. Cartology sales were boosted by momentum in Big W and the Disney collectables program