Woolworths chief executive Brad Banducci said NZ sales were “challenging”, impacted by low sales, Covid disruptions and “a material increase in team costs”. Photo / NZME
Woolworths chief executive Brad Banducci said NZ sales were “challenging”, impacted by low sales, Covid disruptions and “a material increase in team costs”. Photo / NZME
Woolworths profits continue to rise while Kiwis battle higher costs of living and severe weather.
The Australian grocery giant, which operates the Countdown supermarket chain in New Zealand, reported half-year results last week, showing sales for all its stores across Australia and New Zealand reached A$33.2 billion at the end of 2022.
Woolworths reported $4.1b in sales revenue across NZ Countdown stores alone, up 1.3 per cent from the previous period.
Woolworths’ net profit jumped 14 per cent in the last half year, coming in at A$911m for all its stores.
The company’s earnings before interest and tax (EBIT) in NZ was down 39.1 per cent from the previous period, coming in at $122 million.
Chief executive Brad Banducci said NZ operations were “challenging” in the last year, impacted by low sales, Covid disruptions and “a material increase in team costs”.
The company said Ebit declines were due to cost inflation and lower property earnings “reflecting the weaker domestic property market”.
Woolworths group declared A$0.46 per share in dividends, up 18 per cent from the previous half.
Banducci said the group expected Ebit in the second half to rise further in NZ, “but the extent of improvement remains uncertain”.
“Our current priority is to assist our customers and team impacted by devastating recent weather events but pleasingly our supply chain remains in reasonable shape with stock continuing to flow to our stores,” Banducci said of their NZ operations.
Queues of people panic buying at Countdown Westgate ahead of Cyclone Gabrielle. Photo / Dean Purcell
He said, “Woolworths Group has emerged stronger from the recent challenges of Covid and various natural disasters and is well placed to execute on its strategic agenda.”
Woolworths’ average grocery prices in NZ went up 8.6 per cent in the second quarter last year.
Banducci said this was driven by “underlying input cost increases”, labour shortages, and fruit and vegetable growing conditions.
Costs of business in NZ increased 203 base points from the previous period, impacted by increasing staff wages, supply chain costs, store and office cost inflation, and “delayed efficiency initiatives”.
He said sales returned to normal growth in the last half because “shelf price inflation continued to rise during the half in response to industry-wide cost pressures”.
Two new Countdown stores and one replacement store opened in the last half.
The company reported a decline in its NZ food franchises including Fresh Choice and SuperValue “as local shopping behaviours eased”.
“Pleasingly, the business is showing increasing signs of stability with the trading performance improving and Q2 sales growth of 5.3 per cent,” Banducci said.
Banducci said, “The economic environment is likely to become more challenging over the next six to 12 months as cost-of-living pressures persist and we continue to be focused on working hard on behalf of our customers to deliver value for money.”
“We are pleased to report a very balanced group result after an extended period of significant operational challenges and trading volatility,” he said.
Banducci acknowledged the impact of severe weather on their teams in Aotearoa.
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