Woolies posts $1.6 billion profit, Metro delivers strong sales growth

Woolworths Group has posted a full-year profit rise of 4.6 per cent to $1.6 billion, with its Metro Food Stores experiencing strong sales growth.

In its full-year 2023 results, the supermarket giant saw group sales increase by 5.7 per cent to $64.3 billion, with sales momentum increasing throughout the year as it cycled Covid impacts in the prior year and inflation remained elevated.

Brad Banducci, CEO of Woolworths Group, said the 2023 financial year marked a return to relative stability after several years of material Covid-related disruption.

“This was most evident in the ongoing normalisation of shopping habits, with customers shopping more frequently and increasingly on weekends and evenings. Despite the more stable environment, our overall customer experience was inconsistent, impacted by lingering supply chain challenges, and more recently by the impact of inflation on value for money perceptions.”

Metro Food Stores had a strong year, with sales growth of 21.6 per cent to $1,156 million which was assisted by the opening of five new neighborhood stores and a recovery in customer mobility supporting On the Go stores.

“Increasing customer mobility, new store growth, and enhancements to our existing format all contributed,” explained Banducci.

Banducci said that looking ahead to the next financial year, Woolworths expects food inflation in Australia and New Zealand to continue to moderate but will likely remain elevated in some packaged categories.

“Costs in F24 will be impacted by material wage increases and inflation in energy and transport. However, we made good progress in F23 to restore our operating rhythm and have strong productivity plans in place for the year ahead. These include ongoing benefits from ensuring we have the right team available at the right time in our stores, initiatives to better manage stock loss, make things simpler for our store teams, and realise the benefits from our existing supply chain investments.

Banducci explained that they expect the consumer environment to remain challenging, with customers continuing to cut back on non-essential items.

“We remain committed to investing in our customers to deliver increased value and convenience; our teams to help them manage their own cost-of-living pressures; and in our platforms including our store network and supply chain, to create a better, safer, and more sustainable future for all of our stakeholders.”

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