Woolworths grew sales by 6.4% in Q1 this is due to item growth despite a moderation in inflation of 2% compared to year ago, this is driven by deflation in Fresh Produce and Meat categories, Fruit and Veges declined -12% due to improved growing conditions coming out of La Nina and flooding. 

Sales (store-originated) increased 4.4% and eCommerce sales grew by 18.4%, metro stores also saw strong double-digit growth of 12.3%. Overall, there has been growth in the number of shopping trips and a decline in the number of items in baskets reflecting a change in shopper behaviour, we previously saw shoppers doing big trips and avoiding being in store due to covid however this continues to drop away. 

Woolworths saw an increase in demand for Fresh produce and meat due to lower prices and improved availability. Private label showed strong growth of 7.8% reflecting consumers shopping for value due to cost-of-living pressures. The focus on value has been seen in Saver Families and Young Singles and Couple segments. 

How does this compare to Coles? 

Woolworths growth is outpacing that of Coles and both retailers are seeing the same shopping trends emerging, with shoppers focusing on value amidst the cost-of-living pressures from inflation and interest rates for the one third of households with mortgages. An increase in the volume of groceries purchased is underpinned by increase in at home consumption which a way for households to cut down their overall spending. Coles has seen faster growth of private label up 9.4% compared to Woolworths’ 7.8%. Fruit and Veg prices dropped by -14.5% in Coles compared to -12% in Woolworths. Coles’ eCommerce has seen faster growth of 24.6% compared to 18.4% for Woolworths noting that online sales accounts for 12% of Woolworths total sales compared to 9.1% for Coles.