Woolworths still waiting for post-poll boost
Woolworths boss Grant O'Brien has welcomed the end to the year-long political campaign in the lead-up to the federal election, saying it should eventually feed into higher consumer confidence, but the retailer has not seen a sizeable boost in spending since election day.
Mr O'Brien said despite consumer confidence rising since the election, it should not be considered a "silver bullet" for the sector.
"We are pleased that the election is now out of the way and there is a ... higher level of certainty, and that can only help," he said.
"Because those levels of certainty cumulatively will improve customer confidence, and ultimately that's what we need, we have seen and we know very clearly that customers have money to spend and have been saving over the course of the past few years.
"The election is no silver bullet, though, for consumer confidence, and we will be watching it closely as we move closer to Christmas."
Woolworths, which owns a portfolio of retail banners including its flagship supermarkets chain, a convenience store and petrol business, Big W, Dan Murphy's, Masters Hardware and a hotels business, on Thursday said it sold more than $15.68 billion worth of goods during the three months to October 6, up 3 per cent on the same time last year. Sales were up 6.4 per cent at $13.8 billion across the company's key profit engine, the supermarkets and petrol outlets.
Mr O'Brien mirrored comments by other retailers in saying he hadn't seen any great increase in spending patterns since the change in government.
"We are buoyed by the fact the election is out of the way and we are seeing employment levels hold, interest rates continue to be low and housing looks like going in the right direction," he said.
Woolworths said its Australian food and liquor division, which has been locked in a competitive battle with Coles for the past six years, posted a 4.5 per cent lift in sales for the first quarter to $10.6 billion. Like-for-like sales, which strip out the effects of new store openings, were up 2.5 per cent for the period.
Its merchandise and apparel group Big W suffered a 3.6 per cent fall in quarterly sales to $1.06 billion, with the decline mainly driven by the timing of the annual toy sale and deflation across the home entertainment category.
Mr O'Brien said removing the impact of the toy sale, sales at Big W would have been positive. Its burgeoning Masters chain lifted quarterly sales by 52.9 per cent to $182 million.
Online sales from across Woolworths retail stores rose 37 per cent in the quarter and Mr O'Brien said the company was on track to post more than $1 billion in sales from the web this financial year.
Shares in Woolworths rose 5¢ to $34.90.