© Reuters. File photo: A woman walks her dog in front of a Woolworths store in Sydney on July 30, 2013. REUTERS/Daniel Munoz/File Photo
By Byron Kaye and Sameer Manekar
SYDNEY (Reuters) – Australia’s top grocer Woolworths Group boosts shares after an inflation-driven shift away from dining out boosts sales and first-half earnings beat forecasts despite cost pressures said.
Woolworths and a small rival kohls group (OTC:) Ltd has experienced a major shift in Australian consumer behavior since the 2020 COVID-19 lockdown sparked food stockpiles. Sales fell when lockdowns were lifted in 2021, and fell again through 2022 as rising energy and wage prices pushed up shelf prices.
But pressure on the cost of living, from soaring power prices to nine rate hikes since May last year, is starting to pay off for supermarkets, Woolworths said Wednesday.
Food sales have grown 6.5% since early 2023, compared with just 2.4% in the six months to the end of December, according to the company, broadly in line with inflation.
“We’re starting to see more and more trade-ins (restaurant meals) to eat at home,” Chief Executive Brad Banducci told reporters.
Some people have always eaten primarily at home, but as eating out has become more expensive, more customers from all demographics are cooking their meals, he said.
Net profit before material items – principally employee backpay related to historic wage errors – increased 14% to A$907m ($622m), visible alpha consensus8 surpassed A$77 million.
As with Coles’ interim results reported on Tuesday, Woolworth’s higher profit was helped by a sharp decline in COVID-19-related costs.
Woolworths shares were up 2% by midsession, against a 0.3% drop in broader benchmarks, as analysts welcomed the prospect of margin growth for the company exposed to rising supply costs. bottom.
Phillip Kimber, retail analyst at E&P Financial, said in a client note:
Woolworths has declared an interim dividend of 46 Australian cents per share, compared with 39 Australian cents a year ago.
($1 = 1.4586 Australian Dollar)