Supermarket giant Countdown pushes up sales to $6.2 billion

Countdown's result is out today.

New Zealand's second biggest national supermarket chain, Countdown, has made sales of $6.2 billion, up 2.1 per cent on last year.

Woolworths, owner of Countdown, reported its annual result to the ASX this morning.

The New Zealand result for the year to June 30, 2017, showed operating profit fell 1.4 per cent to $309.4 million, which the business said reflected "investments made in our core business through the year and impacts from the New Zealand earthquakes".

"Woolworths Group announced its earning result for FY17, including results for the New Zealand supermarkets business, which includes Countdown and the Progressive Enterprises' wholesale and franchise business.

"The business finished the financial year with record high customer metrics and team engagement scores," a company statement from Auckland said.

"New Zealand supermarkets sales were $6.2b, an increase of 2.1 per cent from last year.
"Full year sales growth was 2.8 per cent. Comparable stores sales increased 1.2 per cent, or 1.8 per cent excluding bulk gift card sales," the business said.

Store wages paid in New Zealand to staff in more than 180 Countdowns, were more than $500m, up 6.2 per cent from the previous year.

"This reflects more people in our stores, doing more hours at higher rates of pay.

"For customers this has translated into improved service," the business said.

"Countdown will continue to invest in our online business. In FY17, our online business again enjoyed double digit growth, and very high levels of customer advocacy.

"Like our customers, we are firmly focused on the cost of food.

"This year there have been price fluctuations in fresh fruit and vegetables, given difficult growing conditions. The Countdown food price index showed a modest increase of just 0.4 per cent across all products over the FY17 year.

"Approximately 3500 products are now at low prices every day, as part of the Price Down programme," it said.

Woolworths' shares are trading around $A27.06 on the ASX.

Countdown is spending about $500m on a big New Zealand expansion plan, opening three to four new shops annually.

Dave Chambers, Countdown chief executive, said last year that eight new Countdown stores had been opened in 2015, as well as two replacement stores and four new franchise stores.

The business would open three to four new stores annually in the next two to three years, he said.

"We will also be accelerating our refurbishments of existing stores," Chambers told supermarket suppliers at the Vodafone Events Centre in Manukau in August last year.

"Our total investment in New Zealand is planned to be around $500m over the next few years and with a goal firmly in place to continue to grow our store numbers throughout New Zealand."