supermarket group Woolworths Limited has announced its full year sales from continuing operations of $58.5 billion, an increase of 6.8 per cent on the previous year, or 4.8 per cent after adjusting for the 53rd week in 2013. Food and liquor sales contributed $40 billion to the overall sales total.Sales for the fourth quarter from continuing operations were $14.1 billion, an increase of 12.7 per cent on the previous year, or 4.3 per cent after adjusting for Easter and the 53rd week of 2013.
“The progress made in the 2013 financial year on our program of transformation for Woolworths Limited has been rewarded with a strong sales result,” said Grant O’Brien, Woolworths CEO. “Momentum continues to increase in Australian Food and Liquor with comparable sales growth for the second half higher than the first half and the prior year,” he said.
Woolworths said the Food and Liquor result demonstrate the benefits gained from “a sharpened focus on its core businesses” and the implementation of its “strategic priorities”.
“We have achieved solid full year sales growth, which is particularly pleasing when measured against challenging retail conditions and an economic environment underpinned by consumer uncertainty and low growth in disposable income,” Mr O’Brien said.
Woolworths Limited said market share, customer numbers and basket size increased compared to the previous year.
Australian Food and Liquor
Woolworths Limited said its liquor sales for the year were $40 billion, an increase of $2.5 billion or 6.6 per cent on the previous year (4.7 per cent normalised). Sales for the fourth quarter were $9.6 billion, an increase of 12.2 per cent on the previous year (4.4 per cent normalised).
Comparable store sales in Australian Food and Liquor increased 2.7 per cent for the year and 2.9 per cent for the fourth quarter after adjusting for Easter. Comparable sales growth for the second half of the financial year was 3 per cent, compared to a 2.4 per cent increase in the first half and 1.1 per cent increase in the previous year.
During the year, Woolworths said the Australian Food and Liquor business continued to increase market share, customer number and basket size with strong volume growth.
“We have returned a solid sales result for the year, which is a reflection of the strength and resilience of our business,” said Tjeerd Jegen, Managing Director Australian Supermarkets and Petrol. “Our Fresh departments, including Meat, Produce and Seafood have performed particularly well in line with our strategy to extend our leadership in Fresh Foods,” he said.
Woolworths said the launch of its ‘More Savings Every Day’ marketing campaign at the end of the fourth quarter had been “well received” by consumers.
Average prices experienced deflation of 2.9 per cent for the year and 3.5 per cent for the fourth quarter when the effects of promotion and volumes were included, according to the Company.
Woolworths said the standard shelf price movement index for the year was inflation of 1 per cent, compared with zero per cent in FY2012, with inflation levels being consistent across the first andn second half of the year. The standard shelf price movement index for the fourth quarter was inflation of 0.9 per cent, compared with third quarter inflation of 1.2 per cent.
According to Woolworths the low inflation rates across “most significant categories” are a result of a continued lowering of prices.
Liquor delivered solid growth for the Company, with total liquor sales of $7.2 billion, an increase of 8.9 per cent on the previous year (7.0 per cent normalized).
“Highlights for the year include the re-branding of all Woolworths Supermarket Liquor sites to BWS, the continued strong growth of Dan Murphy’s, as well as strong performance from all our direct businesses including danmurpheys.com.au, Langton’s and Cellarmasters,” said Brad Banducci, Director of Liquor. “Dan Murphy’s continues to lead multi-option innovation liquor with Click and Collect and mobile both resonating well with our customers,” he said.
Woolworths opened 34 Australian supermarkets during the year, including 13 in the fourth quarter, bringing the total to 897, a net increase of 25 stores. It opened 16 Dan Muprhy’s during the year, bringing the total to 175.
New Zealand Supermarkets
Woolworths’ New Zealand Supermarkets’ sales for the year were NZ$5.7 billion, an increase of 4.1 per cent on the previous year (6.9 per cent in AUD) or 2.3 per cent adjusted (5 per cent in AUD). Sales for the fourth quarter were NZ$1.4 billion, an increase of 10.6 per cent on the previous year (17 per cent increase in AUD) or 2.4 per cent adjusted (8.3 per cent in AUD).
Comparable sales for the year were flat, and after adjusting for Easter, were flat for the fourth quarter. This compared to a 0.8 per cent decrease in comparable sales in the second quarter and a decrease of 0.1 per cent in the third quarter.
Woolworths said lower prices for milk, butter and cheese passed onto its customers, as well as an increased frequency of customer promotions across a number of trading departments had resulted in a low level of inflation. The Countdown Supermarkets food price index showed retail price inflation of just 0.2 per cent for the year (FY12 1.1 per cent) and 0.1 per cent for the fourth quarter (fourth quarter in 2012 0.3 per cent).
“In light of the continuation of subdued market conditions and highly competitive marketplace, compounded by low growth and low inflation, our 4.4 per cent growth for the year is pleasing,” said Dave Chambers, Managing Director PEL Supermarkets. “We have continued to increase our market share, customer numbers and items sold, which is a reflection of our strong brand, new store formats and increased promotional effectiveness,” he said.
Petrol
Petrol sales for the year, including Woolworths/Caltex alliance sites, were $6.8 billion, an increase of 1.2 per cent on the previous year (a decrease of 0.8 per cent adjusted). Sales for the fourth quarter were $1.7 billion, an increase of 6.1 per cent on the previous year (a decrease of 2.5 per cent adjusted). Woolworths said this was impacted by lower average fuel sell prices for the quarter.
Petrol volumes increased 0.5 per cent for the year (decreased 1.4 per cent adjusted) and increased 8.7 per cent for the fourth quarter (flat when adjusted). According to Woolworths volumes throughout the year had been impacted by a flat fuel market and the move towards more fuel efficient vehicles. Additionally, Woolworths said its focus on targeted fuel promotions and providing consumers with offers in its supermarkets reduced its reliance on fuel discounts, resulting in lower fuel volumes but providing positive benefits overall. It said the diesel conversion program continued to increase the range and availability of fuels across sites delivering solid growth and capturing changing market demand.
