Woolworths Group, a major Australian supermarket chain, reported that its first-quarter sales performance was below company targets and market expectations. Despite a 2.7 per cent increase from the prior year, reaching $18.5 billion, chief executive Amanda Bardwell acknowledged the results did not meet internal aspirations. Woolworths operates a network of supermarkets and retail stores across Australia and New Zealand, in addition to offering extensive online shopping options for groceries and household goods. The company is one of Australia’s largest employers.
Key drivers of the sales improvement included strong online momentum and consistent gains in the food sector. Group eCommerce sales experienced a substantial 13.2 per cent surge, totalling $2.7 billion. However, Australian Food sales underperformed, growing by only 2.1 per cent, or 3.8 per cent excluding tobacco sales. This figure fell short of the 2.91 per cent growth forecast by RBC Capital Markets, especially when compared to competitor Coles’ 7 per cent growth.
Analysts have suggested that Woolworths may be losing market share to Coles, based on the comparative sales figures. Average shelf prices at Woolworths declined for the seventh consecutive quarter, impacting overall sales revenue. Despite these challenges, Bardwell remains optimistic, stating, “While the Q1 sales performance was below our aspirations and there remains more to do, the changes we are making to improve value, convenience and availability are being recognised by our customers.”
Bardwell also highlighted an improvement in customer sentiment, noting that Woolworths’ Net Promoter Score had increased by three points year-on-year. The company continues to focus on strategic initiatives aimed at enhancing customer experience and improving overall sales performance in a competitive market environment.