Food and liquor drive sales rise at Woolworths
However, the nation's biggest retailer is still relying on promotions and discounts to keep shoppers coming through the door.
On Tuesday, Woolworths reported sales for the year to June 30 had risen 4.3 per cent to $59.16 billion, despite weak consumer confidence and low inflation. Sales were 2.4 per cent stronger when stripping out the impact of an extra week's trading in fiscal 2013.
The chain said its transformation program had been "rewarded with a strong sales result".
"Momentum continues to increase in Australian food and liquor with comparable sales growth for the second half higher than the first half and the prior year," Woolworths chief executive Grant O'Brien said.
Woolworths shares fell as much as 4 per cent on the release of the sales result, before closing 55¢ lower at $33.22.
At its food and liquor division, which generates 76 per cent of total group sales, comparable store sales rose 2.9 per cent for the fourth quarter, against a 1.3 per cent lift in the fourth quarter of last year. Full-year sales at its Australian supermarkets were up 2.7 per cent, against 1.1 per cent in the previous year.
Average Australian supermarket prices fell 2.9 per cent for the year and 3.5 per cent for the fourth quarter.
Big W saw sales grow by 4.9 per cent for the year but, on a like-for-like basis, were 0.7 per cent weaker for 2013. The previous year, Big W sales were down 1.5 per cent.
Commonwealth Bank retail analyst Andrew McLennan said the fall in Woolworths' share price after the release of its full-year sales results could, in part, be a reaction to the weak Big W figures.
He said the Big W figures had been hit by poor weather, which affected clothing sales, but added that the food and liquor sales results were fine.
"The market was quite a bit weaker in the fourth quarter," he said. "The fact that they haven't fallen by too much ... is a reasonable outcome.
"However, they are talking about deflation accelerating a little bit, so clearly any of the bulls on the supermarket stocks that were thinking inflation is coming back [are] going to be [disappointed]."
Woolworths' hotels division was helped by acquisitions and changes to Victorian gaming legislation, sales rising by 22 per cent for the year.
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Woolworths credited its second-year transformation program for helping lift sales, particularly stronger performance in its flagship Australian food and liquor division. The company also relied on promotions and discounts to keep shoppers coming through the door.
Woolworths reported total sales for the year to June 30 rose 4.3% to $59.16 billion. When adjusting for an extra week of trading in fiscal 2013, sales were 2.4% stronger.
Woolworths' food and liquor division, which generates about 76% of group sales, had comparable store sales up 2.9% in the fourth quarter and full-year supermarket sales up 2.7%. Management said momentum was increasing in Australian food and liquor sales.
Woolworths shares fell as much as 4% on the release of the sales result, before closing 55 cents lower at $33.22.
Big W's reported sales grew 4.9% for the year, but on a like‑for‑like basis they were 0.7% weaker for 2013. Analysts pointed to poor weather hurting clothing sales as a contributing factor to the weaker comparable performance.
Average Australian supermarket prices fell 2.9% for the year and 3.5% in the fourth quarter. Analysts noted deflation had accelerated slightly, a trend that could disappoint investors who were expecting inflation to return to supermarkets.
Woolworths' hotels division saw a 22% rise in sales for the year, helped by acquisitions and changes to Victorian gaming legislation.
Woolworths' chief executive Grant O'Brien said momentum continues to increase in Australian food and liquor, with comparable sales growth in the second half higher than the first half and higher than the prior year—crediting the company's transformation program for the stronger sales outcome.
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