Woolworths hurting down under

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Woolworths hurting down under

Published Date: 2017-11-17 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Woolworths hurting down under

Sales at David Jones have fallen, partly due to store refurbishments, while non-food sales in South Africa are also down

Woolworths is finding conditions tougher than expected in Australia, with sales at the David Jones department store it acquired three years ago falling more than 5% in the 20 weeks to 12 November. In a trading update yesterday, Woolworths said while sales were under pressure, it managed to protect its gross margin. It blames refurbishments at two stores for the downturn, as well as the implementation of a new inventory management system and says sales picked up towards the end of the period.

The retailer's Country Road division grew sales 8.3% in Australian dollar terms, with comparable stores excluding the Politix chain it bought a year ago falling 0.4%.

Back home, Woolworths says food sales grew ahead of the market, rising by 9.3% over the period as it raised prices by an average 4.5% and sold more food. Comparable store sales increased by 5.3%. Sales of clothing, cosmetics and homeware were under pressure as the tough economic affected consumer sentiment and discretionary spending. Sales increased by 0.7%, with price movement of 0.9% and a 2.4% decline in comparable store sales.

Related article: Woolworths hit by waning confidence in South Africa and Australia

Woolworths says its financial services debtors' book reflected positive year-on-year growth of 4.8% at the end of October. Its annualised impairment for the four months to end October declined to 5.7% from 6.4%.

The company's shares fell 2.4% yesterday to R53.75.



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