Woolworths sees return on digital investment
Woolworths Group reported a “robust” e-commerce business in the quarter ending 1 April 2018, as it realises a return on its investment in digital throughout the year.
In its quarterly earnings statement, the retailer on Wednesday said Australian online food sales have continued to grow at a rate of around 30 per cent off the back of its investment in digital initiatives, including the national roll-out of click-and-collect and the commissioning of two new customer fulfilment centres in the quarter.
Besides the growth of online food sales, the supermarket business noted an increase in overall customer satisfaction, both for in-store and online, from 75 per cent in the same quarter last year to 81 per cent in this quarter.
Woolworths’ liquor business, Endeavour Drinks, also improved its online offering in the quarter, with Dan Murphy’s and BWS’s e-commerce sales growing over 20 per cent. At the end of the quarter, Express Delivery was available in 319 BWS stores, according to the group.
Easter timing blamed for sales dip
Overall, Woolworths Group saw a 4.3 per cent increase in third quarter sales to $14.2 billion. Australian food comparable sales increased by 4.4 per cent for the third quarter, while total revenue was up 4.7 per cent to $9.5 billion, underpinned by a moderation in price deflation and comparable transaction growth.
Easter-adjusted Australian food sales were up 4.2 per cent, while comparable sales increased by 4 per cent, in line with market forecasts.
Woolworths’ comparable food sales have again outpaced rival Coles, which booked Easter-adjusted food and liquor comp growth of 1.3 per cent for the third quarter last week.
Price deflation moderated compared to the prior corresponding period, with average prices down 1.3 per cent in the third quarter, compared to a 2.5 per cent decline in Q3FY17.
Troubled discount department store chain BIG W’s sales increased by 3.2 per cent to $770 million, but when adjusted for the timing for Easter were down 1.3 per cent. Easter-adjusted comparable sales declined by 1.2 per cent.
The Easter-adjusted decline is a step backwards for the business, which experienced first quarter sales growth of 2.9 per cent.
However, Woolworths’ Group chief Brad Banducci said he was pleased with progress the business had made pivoting from turnaround to transformation in the third quarter.
“Our focus for the remainder of FY18 is on delivering consistently good shopping experiences across all stores and days of the week, embedding current strategic initiatives,” he said.