Woolworths New Zealand first-half sales up 2.7% as industrial action hampers Aussie result

Woolworths' first-half result has been hampered by collective action in Australia, but the New Zealand arm has bounced back.

The New Zealand arm of the Woolworths supermarket chain has reported a strong performance in the first half of its financial year, with sales and earnings growth.

However, its parent group across the Ditch saw a significant drop due to industrial action throughout mid-late 2024.

In the six months to January 5, Woolworths New Zealand’s total sales increased by 2.7% to $4.28 billion, up from $4.17b in the previous corresponding period.

Comparable sales also consistently grew, with first-half sales increasing by 3.3%, while Q2 sales increased by 3.2% due to strong e-commerce growth.

Woolworths NZ’s earnings before interest and tax (ebit) reported perhaps the largest growth in the half, up by 15.2% to $82 million compared to $71m in 1H24.

Item prices fell slightly across the half, with average prices declining 1.2% in Q2, largely due to deflation in fruit and vegetable prices.

Woolworths' grocery delivery app Milkrun has been made available at a further 19 stores over the half as online sales grew.

Another area that reported strong performance was e-commerce with $619m in sales, up by 14.6% in H1, while penetration also grew by 14.4%.

Online sales are a key investment for Woolworths as part of the New Zealand transformation, with express pick-up, delivery and its app Milkrun supporting strong growth.

Milkrun is now available in 76 stores (+19 in H1), with direct-to-boot available in 50 (+7 in H1).

The New Zealand arm’s rebrand is also maintaining momentum, with 35 more “Countdown” supermarkets rebranded to “Woolworths” over the half. A total of 110 stores have now been rebranded out of 186 supermarkets.

During the half, two stores were closed while 11 renewals were completed.

Looking at the division’s franchise operations, franchise revenue increased by 3.3% to $356m.

Two new FreshChoice stores were opened and 13 SuperValue stores were converted, making a total of 63 across New Zealand, with 14 remaining SuperValues.

Woolworths NZ made progress in its Everyday Rewards programme, now at two million active members as of Q2.

The business also ratified a new two-year collective agreement for team members and launched a multi-skilling programme.

Looking ahead, sales in the first seven weeks of H2 grew by 4%, although the business acknowledged the impact of New Year’s Day in the current quarter.

The New Zealand arm is expecting its ebit for the second half to be higher than the prior corresponding period.

New managing director Sally Copland will also begin her tenure in charge of the operation post-July.

Group performance

Woolworths' wider group performance suffered from the impact of industrial action, supply chain commissioning and dual-running costs, as well as price and promotional investment.

Group sales did increase by 3.7% in the half to A$35.9b ($39.77b), but group ebit for 1H25 fell by 14.2% to $1.45b, down from $1.69b in 1H24.

According to the business, industrial action by Woolworths Australia Food employees in November and December impacted sales by approximately A$240m.

Similar to New Zealand, e-commerce performed well, growing by 18.3% to A$4.67b.

Group net profit after tax reported the largest decline, however, falling by 20.6% to A$739m.

Woolworths Group chief executive Amanda Bardwell said that customer metrics have improved in light of a challenging half impacted by external and internal factors.

“We have clear priorities for the remainder of 2025, which are focused on three key areas. We need to get it right for our customers by excelling at the retail fundamentals in areas like value, range and availability. This starts with improving price perception and rebuilding trust with consumers,” Bardwell said.

“We have worked hard to deliver value to customers in H1 but we know we have more opportunities to help customers find value when they shop with us, including clearer promotions, improved ticketing and online resources to explain pricing.”

Bardwell also made mention of the Australian Competition and Consumer Commission’s inquiry into the supermarket sector, which is set to release its final report shortly.

A fully-franked interim ordinary dividend of A39c has been declared, down 17% compared to the prior corresponding period.

Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.