Woolworths customers buy less as cost of living spirals

The grocery store chain and retail group on Wednesday introduced it had made a $1.62 billion full-year revenue after tax, up 4.6 per cent from the prior 12 months, a outcome principally according to expectations.

Income elevated 5.7 per cent to $64.3 billion for the 52 weeks ended June 25, in comparison with the 52 weeks prior.

Australian grocery store gross sales have been up 4.7 per cent to $41.4 billion, with ecommerce gross sales returning to progress after initially falling when the COVID lockdowns ended.

Woolworths Group CEO Brad Banducci stated the monetary 12 months marked a return to “relative stability” following years of disruption through the pandemic.

Most notably Woolies skilled a normalisation of purchasing habits, with prospects purchasing extra continuously through the weekends and evenings.

“Regardless of the extra secure surroundings, our total buyer expertise was inconsistent, impacted by lingering provide chain challenges, and extra lately by the influence of inflation on worth for cash perceptions,” Banducci stated.

Meals-price progress started to reasonable within the second half, with costs even dropping for meat, fruit and greens.

Woolworths expects costs to maintain rising in some packaged classes.

Large W complete gross sales have been up eight per cent to $4.8 billion, however its buying and selling surroundings “modified dramatically” between the primary half and the second half, Banducci stated.

Gross sales dropped within the second half – even past executives’ expectations – as shoppers reduce on discretionary gadgets, notably within the fourth quarter.

“The sector turned extraordinarily aggressive with increased ranges of promotions and reductions,” Banducci stated.

Thus far these tendencies have continued in fiscal 2024, with stable progress in Woolworths‘ meals companies however Large W gross sales down six per cent on the prior 12 months.

“Prospects are cautious, placing fewer gadgets their baskets,” Banducci stated.

However loyal prospects are persevering with to buy with Large W and a few classes like On a regular basis Necessities proceed to carry out strongly.

Woolworths predicts the patron surroundings to stay difficult in 2023/24, with prospects persevering with to chop again on non-essential gadgets.

Woolworths declared a last dividend of 58 cents per share, up from 53 cents a 12 months in the past.

-with AAP

Supported by the Authorities of South Australia