Woolworths Group has recorded strong online sales in HY19, with plans in place to continue improving its digital offerings in the months to come.
In its half-year profit and dividend announcement for the 27 weeks ending December 30, 2018, Woolworths Group said it recorded “good progress” in digital and data, with group online growth coming in 30 percent higher in HY19 YOY. This brought group sales to a total of $30.6 billion.
Other highlights from the last six months of trade were sales from continuing operations increasing by 2.3 percent, while the EBIT from continuing operations landed at one percent higher than they were in HY18.
Commenting on the group’s results, Brad Banducci, CEO of Woolworths Group said it had been a challenging half, but that a strong customer shift to online helped to boost sales.
“It was a challenging half across all of our businesses with subdued customer demand and volatile weather in the second quarter. Importantly, our customer metrics have remained strong reflecting our Customer First Team, first culture and focus on being ‘consistently good’. Group sales from continuing operations increased by 2.3 percent and EBIT from continuing operations increased by 1.0 percent with a strong underlying customer shift to online during the half,” he said in a statement.
“Despite our sales improvement, the market remains challenging with subdued consumer demand and input cost pressures,” he continued.
Woolworths Group also said that Big W had a high-performing half, with comparable sales increasing by 3.8 percent over the last six months. The group was pleased with performance across the board over Christmas, claiming trade was “positive” despite market slowdown in both Australia and New Zealand.
Moving forward, the business says its focus will be on enhancing its digital and data capabilities to further improve its user experience, while also addressing capacity constraints. The digital improvements are expected to be actioned alongside efforts to focus on the customer, to reposition Dan Murphy’s following a reduced EBIT in HY19 and to translate Big W sales into profitability by reviewing the retail giant’s property and DC network.
“With BIG W sales having stabilised and customer metrics improving, we are now focused on converting sales into profit and are currently reviewing the BIG W store and DC network. We will provide an update on the outcomes of the review in the next four to six weeks.” The group’s statement said.
“In summary, while the first half was below our financial expectations, we made progress in a number of important areas and are confident that if we remain focused on our key priorities, we will continue to transform our business for the benefit of all of our stakeholders”, Banducci explained.
These results come after the business reported lower-than-expected performance in Q1, with comparable sales growth of 1.8 percent for the 14 weeks leading up to September 30, 2018. This represented a 4.9 percent drop in growth compared to the same period in 2017.