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Woolworths sees continued growth in turnover and concession sales despite high base and post-COVID demand

Woolworths reported that its turnover and concession sales from continuing operations, excluding David Jones – disposed of in the prior year, for the 26 weeks ended December 24, 2023, increased by 5.4%, and by 4.4% in constant currency terms.

The Group emphasised that this growth should be considered in the context of the high base set in the prior period, during which sales from continuing operations grew by 12.5%, driven in part by the post-COVID pent-up demand in Australia.

The retailer stated that during the last six weeks of the period, including sales during the key festive season, trading momentum accelerated to 7.2%, supported by robust trade plans.

Woolworths highlighted the strong underlying growth of its Food business, with turnover and concession sales growing by 8.4%, and by 7.2% on a comparable store basis.

The retailer also mentioned that underlying product inflation for the period averaged 9.1%, below headline food inflation.

Sales in the last six weeks of the period grew by 8.6%, delivering positive underlying volume growth as product inflation eased. Additionally, online sales increased by 46.6%, contributing 5.1% of South African sales.

The Fashion Beauty and Home business experienced steady progress against its strategic priorities, with turnover and concession sales growing by 2.2% for the 26-week period. Sales growth in the last six weeks of the period improved to 3.8%, supported by successful Black Friday promotions and festive season trade. Net trading space increased by 0.3% relative to the prior period, while online sales grew by 26.9% and contributed 5.4% of South African sales.

Woolworths Financial Services book reflected a year-on-year increase of 4.9% to the end of December 2023, driven by growth in new accounts and credit card advances. The annualized impairment rate for the six months ended December 31, 2023, was 6.3%, compared to 5.5% in the prior period.

Country Road Group sales for the current period declined by 5.0% in a challenging trading environment, with consumer sentiment in Australia at near-record lows.

This decline should also be considered in the context of a high base in the prior period, in which sales grew by 25.5% following the strong recovery from the COVID-impacted lockdowns. Sales growth in the last six weeks of the period was positive, at 1.3%.

The Country Road brand continued to deliver a market-leading performance across key categories, with trading space increasing by 6.6% during the period.

The contribution from online sales increased marginally to 26.8% of total sales.


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