Woolworths sales growth held back by petrol slide
A fall in fuel sales has held back Woolworths' overall first quarter retail turnover.
The supermarket giant posted first quarter sales of $16.2 billion, a 3 per cent rise on the same period a year ago.
However, the rise would have been 4.1 per cent if it was not for a decline in both the volume and price of fuel sold.
Fuel volumes were down 3.6 per cent and the value of fuel sales fell 4.5 per cent, despite lower discounting due to regulator imposed limits on the scale of shopper docket fuel discounting.
The core Australian food and liquor division posted modest sales growth of 3.9 per cent.
Grant O'Brien said the company had suffered from the restriction on shopper docket fuel discounts.
"Following a pleasing July result, trading was softer in August and September with growth impacted by differences in the timing of promotional activities compared to the prior year and the cycling of higher fuel discount activity," he noted in the report.
Investors were not accepting the excuses, however, with normally stable Woolworths shares heavily sold off in morning trade.
At 10:55am (AEDT) Woolworths shares were down 4 per cent to $34.57.
Shareholders would also have been concerned about continued weakness in the retailer's Big W discount department store group, where sales slipped 0.4 per cent.
The company's hotel group recorded a 1 per cent fall in turnover, largely due to additional Victorian gaming taxes, although Woolworths also cited difficult trading conditions in that state and Queensland.
The firm's new hardware division recorded large sales growth, but that is to be expected as it continues adding new outlets, and it has so far struggled to compete on profitability with Wesfarmers' dominant Bunnings chain.
Grant O'Brien cast an optimistic light on the disappointing sales numbers, and said they should pick up this quarter.
"While first quarter sales were lower than expected, we are confident that our trading plans will improve momentum in the second quarter which includes the key Christmas period," he concluded.
