Woolies food sales dipped in March quarter

Supermarket giant Woolworths has posted a slight increase in group sales for the third quarter, but food sales declined as trading returned to normal after a surge in coronavirus spending last year.

For the 13 weeks to April 4, food sales in Australia were down 2.1 per cent on a comparable basis to $11.09 billion. New Zealand food sales were down 7.5 per cent on a comparable basis.

However, overall group sales were up 0.4 per cent to $16.56 billion, helped by continuing strong trading in the Big W and Endeavour Drinks businesses.

“There were two very distinct trading periods in Q3,” CEO Brad Banducci said on Thursday.

“The first seven weeks before we began to cycle COVID and the second six weeks as we cycled the peak growth of the prior year.”

Group sales growth was strong in the first seven weeks of the quarter but in the final six weeks, food and drinks sales declined on the prior year.

The same period last year produced double-digit sales growth at supermarkets, as an impending lockdown due to COVID-19 triggered panic-buying by shoppers for items ranging from pasta to toilet paper.

Sales at Big W stores remained strong in the quarter, increasing 6.3 per cent to $1.02 billion, while sales at the Endeavour Drinks businesses rose 6.3 per cent to $2.39 billion.

The Hotels business, which had been hit because of venue closures last year, has seen sales jump 11.5 per cent to $390 million.

Woolworths said customer shopping behaviour continues to normalise, with food customers shopping less frequently.

There also been a “moderation” in the number of items customers put in their baskets and customers are also shopping more on weekends.

Additional costs associated with COVID safety measure have continued to trend down over the quarter, the retailer added.