Woolworths has lifted annual sales by 4.7 per cent to $56.7 billion, despite the supermarket giant’s price war with Coles exacerbating tough retail conditions.
Woolworth’s key Australian food and liquor division increased sales by 3.8 per cent to $37.5 billion in 2012, while home improvement sales leapt 24.7 per cent and petrol sales rose 11.4 per cent.
Chief executive Grant O’Brien said the overall result was underpinned by more customers buying more products more often and Woolworths snaring a bigger market share despite consumer uncertainty and an unseasonably wet summer.
However, Woolworths’ ongoing price war with supermarket rival Coles had exacerbated the tough trading conditions.
“Importantly these results have been achieved at a time when our customers are benefiting from lower prices due to strong competition and continuing deflation across our businesses,” he said.
“This confirms the resilience of our business as we continually adapt to the changing economic environment.
“There is a lot of hard work ahead, but with a lot of upside as well.”
Woolworths was quick to play down the effect of the federal government’s family assistance handouts, with Mr O’Brien saying the increase in food and liquor division sales had begun before the payments were made.
“We’ve had a good and steady quarter,” he said.
“It’s not a result that’s necessarily been back ended.
“We’ve seen an improving comparative sales number in our supermarket businesses over the course of the quarter.”
Sales for Woolworth’s electronics chain Dick Smiths were also up 4.3 per cent from the previous year, but that had not caused the retailer to rethink its strategy of closing nearly 200 of its stores.
Instead Mr O’Brien said the increased sales reflected a strong promotional program, stock clearances and store closure sales.
Woolworths investors cheered the retailer’s results, pushing its shares up 27 cents to $27.89 in an overall weaker market.
RBS Morgans Brisbane private client adviser Craig Walker said while Woolworths’ sales had exceeded expectations, the increase in share price was exacerbated by a down day on the Australian market.
“Their fourth quarter sales figures were slightly above the market expectations,” he said.
“On the back of that and I suppose there not being too many other interesting places to put your money today Woolworths was up a bit.”
