Woolworths' March quarter results decline as trends stabilise & growth impacted by cycling COVID

Comparable sales for the March quarter fell 2.1 per cent to $11.1 billion for the Group's supermarkets division in a quarter described by CEO, Brad Banducci as a story of two halves.

"There were two very distinct trading periods in Q3: the first seven weeks before we began to cycle to COVID and the second six weeks as we cycled the peak growth of the prior year," he said.

As such, the first seven weeks show significant growth and the second six weeks reflect a decline.

“While food customers are still shopping less frequently, the growth in the number of items customers put in their baskets is slowing,” Banducci said.

“Customers are also shopping more on weekends, state-based performance is becoming more balanced and there is less divergence in trading across the fleet, other than in CBD and transit locations.”

Banducci said that sales are expected to continue to fall in the June quarter as the retailer cycles through the period of pandemic panic buying from last year.

“We continue to expect sales to decline over the March to June period for all businesses other than hotels, where June quarter sales declined 86.3 per cent [last year],” Mr Banducci said.

E-commerce for the group continued to grow up 64.2 per cent to $1.3 billion. Woolworths continues to invest heavily in this space to improve the digital experience for its customers and increasing efficiencies of 'X' businesses. Improvements include increased personalisation, navigation and relevant digital campaigns and offers. Average weekly traffic to Woolworths digital channels increased by 48 per cent to 12.4 million visits every week.

Endeavour Group sales up for the quarter were up 6.3 per cent compared to this time last year but while growth in the spirits/RTD category was strong, supported by sales of gin and seltzer, there were declines in beer and wine sales given the sales surge of the prior year.

E-commerce growth for Endeavour Drinks increased by 23.8 per cent year on year with sales of $193 million.

In the past quarter, Endeavour completed its acquisition of Oakridge Wines, ends the quarter with 1390 BWS around the country and 247 Dan Murphy's outlets.

Improved trading trends mean that hotel trading was up by 11.5 per cent to $390 million in the first seven weeks of the quarter and an improvement in the last six weeks, again reflecting the cycle to COVID lockdowns. At the end of the quarter, all venues were operational with the exception of Greater Brisbane.