Woolworths warns sales will slow as shoppers get ‘extremely value-conscious’

Woolworths (ASX:WOW) has sounded a warning over its earnings, with the leading Australian grocery chain expecting first half profits for 2025 to be down somewhat as shoppers bunker down on supermarket spending.

This will see earnings end up below previous expectations, Woolies shared today; around $1.48bn to $1.53bn and lower than $1.595 billion in 2024’s opening months.

It’s not unexpected either with many Australians continue to “feel the pinch” as the average costs of food, clothing, and other necessities all keep rising.

Between rapidly growing sentiment around bargain buying that’s seen Aussie shoppers chasing down every half-decent discount and promotion they can find – a topic Woolies is in Federal Court for right now – and competition expansion, Australia’s largest supermarket group is starting to feel the trickle down.

Woolworths chief Amanda Bardwell, who’s been in charge for just seven weeks, warned these financial factors will keep contributing to a profits slowdown that even the impending Christmas trading period may not truly shake.

“Looking ahead, we expect customers to remain extremely value-conscious with cost-of-living pressures to continue for the remainder of fiscal 2025,” Ms Bardwell said.

“Customers remain highly value-conscious and continue to purchase more items on special or trade down to lower priced items, including Own Brand.”

In today’s report, Woolworths did confirm its total sales had increased approximately three percent for its supermarkets. Its Australian Food sector led the way, with total sales actually up by 3.8% through “a strong focus on value in the quarter, improved availability, Disney collectibles, and strong e-commerce sales growth.”

The ASX 200 heavyweight also briefly touched on its ongoing blockbuster battle with competition watchdog ACCC, which has alleged both Woolies and archrival Coles created “illusory” discounts to trick their shoppers.

Woolworths said it will keep “engaging in good faith” with any inquiries and investigations.

The supermarket giant opened at $32.81 a share on Wednesday.

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