Supermarket sales grew only 1.5 per cent in the March quarter as rival Coles managed 5.1 per cent, and Brad Banducci says shoppers will keep cutting back.
Already a subscriber?Woolworths’ outgoing chief executive, Brad Banducci, expects trading conditions to be difficult for the next 12 months asenergy and insurance bills, and the fading prospect of mortgage relief, lead shoppers to cut supermarket spending.
Food inflation in the March quarter declined by 0.2 per cent, compared with an increase of 5.8 per cent for the same time last year. But Mr Banducci emphasised that this would not mean substantial cuts in shelf prices because input costs such as wages and energy bills were going up. He said shoppers were coming in more frequently to stores to buy items on promotion, but the amount they were spending on each trip was dropping. “Higher frequency and a slightly smaller basket,” he said.Competition was not isolated to Coles or Aldi, with shoppers also eyeing specials at Amazon, Costco and Bunnings.
E&P analyst Phil Kimber said Coles had run a “successful Pokemon promotion from early February to March 26”, while Woolworths did not have a collectables promotion during that time. “The impact on growth rates is amplified as the opposite occurred in the previous corresponding period”, - when Woolworths in early 2023 ran a “Bricks Farm” toy building blocks collectables program.would require the co-operation of suppliers.
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