by Chris Becker
One half of the countries retail duopoly surprised this morning with some bad news in its quarterly sales report, including another round of job cuts, totalling 800 positions.
From Fairfax:
Woolworths’ total third-quarter sales were down 2.1 per cent to $14.96 billion. The results were dragged down by negligible same-store growth at its food and liquor arm, including subdued sales in April, and poor petrol sales.Total third-quarter sales were down 2.1 per cent to $14.96 billion, although liquor sales for its 1,240 stores were up 1.7 per cent to $10.62 billion, with same-store sales up just 0.2 per cent, lower than analysts had expected. Both figures adjust for an extra week in Easter.
Same-store petrol sales slumped by 19.3 per cent, Easter adjusted.
These sales figures come after an announcement in February that its full year profit growth would slump to 1.8% as the wolves of retail deflation circle, even with lower interest rates putting more savings into customers back pockets.
Following this announcement, another shocker – more jobs to go:
Woolworths chief executive Grant O’Brien told investors on Wednesday that the company has already axed about 400 full-time positions from its back office operations.
Now a further 400 positions will be cut as the retailer accelerates its ‘Lean Retail’ model designed to save $500 million in costs during the 2015/16 financial year
The share price is down nearly 4% in morning trade, now at a three year low as the steam comes out of the consumer staples sector.
In fact the sector better be hoping that the forthcoming Budget doesn’t reduce consumer spending or confidence any further, since monetary policy is now just pushing on a string.