Woolworths’ Q3 results showed food sales grew by 1.5% (1.1% comparable growth excluding new stores) this is way behind Coles’ growth of 5.1%. It has been a tough trading environment for both major retailers as they have faced increased scrutiny with cost-of-living pressures facing many households and the senate inquiry into prices of groceries. 

Woolworths shelf prices dropped -0.2% continuing from last quarter where food inflation slowed to 1.3% and there has been a slowdown of volume growth from discretionary categories. Deflation has been driven by fresh produce prices down -6.2% due to increased supply with more favourable growing conditions and meat has dropped -9% due to lower costs. Drilling down further into brick-and-mortar vs online sales sees brick and mortar sales growth down -0.8% but this has been offset by online sales and metro stores sales. Overall, there has been steady number of shopping trips but a drop in the number of items per basket, perhaps shoppers are showing restraint amid cost-of-living pressures and forgoing certain items. 

Woolworths ecommerce sales have seen 18% growth with an increase in active customers and basket size in terms of number of items. Online sales now account for 12.4% of Woolworths total supermarket sales. 

Woolworths shoppers have buying more items on promotion, buying more Private Label/Homebrand and cross shopping (at multiple retailers, outlets or website) to hunt for better value.