Australian supermarket giant Woolworths Group Ltd (ASX: WOW) has posted a modest rise of 2.8 percent in overall sales for the third quarter of the 2024 Financial Year, although a fall of 4.1% in sales at Big W indicated that customers on a budget have become more wary of spending.
The 2.8% rise in group sales took Woolworths to $16,800 in the third quarter of the 2024 FY, a rise from $16,338 million for the same period last year.
Within this, the biggest rise was in Australian business-to-business (B2B) sales, which were up 3.2% to $1,098 million, while more modest increases were evident in food sales – which rose 1.5 percent to $12,578 million, New Zealand food sales lifted 1.4% to $1,884 million.
Big W sales were down 4.1% to $1,002 million – from $$1,046 million the same time last year.
Woolworths Group CEO Brad Banducci, said the results indicated greater caution being taken by customers in their spending habits, although he expected the situation to improve as inflation continued to moderate.
“It was a challenging quarter across the Group with a noticeable shift in customer sentiment and shopping behaviours since Christmas,” he said.
“Customer metrics and sales growth across the Group have been impacted but encouragingly unit volumes and customer metrics improved as the quarter progressed and we expect more stable trading in Q4.
“In Australian Food, total sales increased by 1.5% with Woolworths Food Retail’s adjusted total sales also increasing by 1.5%: sales growth reflects the context of a very strong Q3 F23, a material moderation in inflation, and the cycling of collectibles.
“BIG W total sales for the quarter declined by 4.1% reflecting increased consumer caution and downtrading most evident among budget customers.”
Mr Banducci added that both Australia and New Zealand had experienced weak consumer sentiment for a while, causing people to change their behaviour in shops due to concerns about the overall cost of living.
“Customers are looking for more ways to save, are cross-shopping more, buying more own brand and buying more product on promotion,” he said.
Woolworths Group Ltd has been trading at $31.82.