Woolworths Group's Countdown chain of supermarkets in New Zealand says grocery prices fell at an even faster pace in the fourth quarter, although growing demand for online sales helped boost annual revenue.
New Zealand food sales rose to $6.4 billion in the 52 weeks ended June 24, from $6.2 billion a year earlier, though earnings before interest and tax (ebit) dropped 8.2 per cent to $284 million, according to Sydney-based Woolworths' annual sales statement. The decline in earnings was due to increased staff costs, even as New Zealand headcount shrank to 18,430 from 19,228 a year earlier, and increased spending on its 'CountdownX' digital unit.
Countdown, along with SuperValue and FreshChoice, competes with Foodstuffs in New Zealand, a retail group comprised of two cooperatives that operates the Pak'nSave, New World and Four Square chains. The brand's local holding company, Woolworths New Zealand, changed its name from Progressive Enterprises at the end of June.
The retailer said New Zealand deflation accelerated in the fourth quarter, with a 1.8 per cent decline in average prices "largely driven by lower fruit & vegetable and grocery prices." Still, its gross margin was unchanged at 24.2 per cent.
According to figures from Statistics New Zealand, grocery prices increased 2.1 per cent in the year to June 30, while fruit and vegetable prices rose 9.3 per cent. The Stats NZ food price index collects prices from 650 outlets in urban areas each month, including supermarkets, greengrocers, convenience stores, fishmongers and butchers, as well as restaurants and other food outlets.
