Woolworths Enjoys Sales Growth despite Economic Downturn

Submitted by Jim Thesiger on 23 July, 2009 - 06:10

Despite the global economic crisis, Woolworths (WOW), a renowned Australia based retail group has recorded a sales growth of 7.5 percent for this year till June 30 due to a turnover in clothing and consumer electronics which had seen a double digit growth. Plasma television and computer selling through Dick Smith, the burgeoning business in India and food and liquor business through its supermarket brands were at top notch to help the group which is expected to record a standout profit when the company report on August this year. The company is expected to record a profit $1.77 billion for the full year.

Michael Luscombe, the chief executive of the company said that the consistent sales growth in consumer electronics, clothing, food retailing and homewares have played a key role to boost up the sales for Woolworths this year. The sales of food and liquor were significantly influenced by the fact that more people were dining at home, he added. This was judged based on the statistics which shows that there was a considerable growth in the sales of cooking and food ingredients in last three quarters. However, Mr. Luscombe refused to make any comment regarding the speculation that Woolworths might consider to move into the $30 billion hardware sector.

The company yesterday recorded a $49.6 billion sale for the full year in the normalised basis which is 7.5 percent or $3.4 billion up on the earlier year. Its supermarket arm which focuses on Australia and New Zealand along with the patrol discount offer reported a sales worth of $42.33 billion seeing a gain of 7 percent.

However, the company had a flat growth in its supermarket division in New Zealand where it dropped 1.5 percent in Australian dollars due to a weaker New Zealand domestic economy. Woolworths' hotel business also faced difficulties due to the economic crisis which saw a decline of investment at the pub restaurants.

Market analysts mentioned that, the headline sales of Woolworths was right in the track, while the company’s cautious movement secured an impressive 11.5 percent rise in the fourth quarter. According to Campbell McComb the investment director of Armytage Private, the market response was subdued despite the impressive sales figures since Woolworths share price raised 8 percent or $2 in last four weeks. Woolworths shares closed at $27.58 losing 0.4 percent.