Woolworths Q3 Sales Beat Forecasts as Price Cuts Boost Grocery Volume

Woolworths Group, Australia’s largest supermarket chain, posted stronger-than-expected third-quarter sales, supported by strategic price cuts that drove increased volumes in its core grocery segment despite ongoing cost-of-living challenges. The company reported total group sales of A$17.31 billion ($11.09 billion) for the quarter ending March 31, surpassing analyst estimates of A$16.64 billion and marking a 3.2% increase from A$16.77 billion a year earlier.

Sales in the key Australian Food division rose 3.6% to A$13.05 billion, fueled by a rebound in consumer demand and robust online performance. E-commerce sales surged 15.7% year-on-year to A$2.2 billion, reflecting Woolworths’ ongoing investment in digital channels. The recovery follows a disrupted second quarter, when a 17-day strike at distribution centers impacted supply and drove customers to rival retailers.

To stay competitive and attract value-driven shoppers, Woolworths continued lowering prices, resulting in a 0.5% year-on-year decline in average food retail prices, excluding tobacco. This marks the fifth straight quarter of price deflation as the retailer leans into discounting amid high consumer sensitivity.

CEO Amanda Bardwell acknowledged the uncertain economic climate and intense retail competition, but expressed confidence in the company’s strategic direction, promising further insights in the August full-year results.

However, Woolworths also faced headwinds from extreme weather. Heavy rainfall in Queensland and Northern New South Wales led to an estimated A$20 million to A$25 million in additional costs due to stock losses, transportation disruptions, and damage to its Hervey Bay store.

Despite these challenges, Woolworths’ quarterly performance underscores its resilience and ability to adapt in a tough retail environment, maintaining its dominant market share in the Australian grocery sector while advancing its digital growth strategy.