THE nation’s largest supermarket retailer, Woolworths Group, has recorded sales of $69.1 billion and pre-tax earnings of $2.754 billion for its full year ended 30 June, in annual results announced this morning.

Group sales were up 3.6 percent on the previous financial year, while EBIT was down 12.6pc.

Within that, the company’s Australian supermarket division was a significant contributor to the declining pre-tax earnings, showing sales up 3.1pc to $51.4b for the year, while EBIT was down 10.5pc to $2.753b.

Fresh food sales increased by 5pc for the year, with fresh meat and fruit & vegetables growing in the ‘high single digits’, the company reported. Modest inflation in fruit & veg and item growth in chilled meat contributed to fresh division sales growth. Higher meat procurement prices were offset to some extent by deflation in categories including pantry, snacking, freezer and everyday needs.

Gross margin in supermarket sales decreased by 25 bps to 28.6pc, with key drivers including livestock inflation that was not fully passed on to customers.

Excluding the impact of industrial action in the first half and incremental supply chain costs, Australian supermarket division EBIT would have declined by only 5pc last financial year, Woolworths said, with fourth quarter performance stabilising and broadly flat on the same period in the previous year.

Woolworths group chief executive Amanda Bardwell, said after a highly disrupted first half, the company had taken action to reposition for long-term sustainable growth.

In the first eight weeks of the current financial year ended 31 August, Woolworths Australian Food total sales increased by 2.1pc compared to the prior year.

“Most important was getting it right for our customers. We have invested in lowering shelf prices, increasing specials and absorbing cost price increases on everyday items (ie red meat) and making our pricing clearer and easier to understand,” she said.

Similar to Coles’ annual results published yesterday, Woolworths saw 21pc growth in ecommerce (online) retail sales last year – a continued strong trend since the COVID era in 2019-20.

Woolworths store numbers across Australia and NZ (excluding scaled-down Metros) have now grown to 1117 outlets. Nearest rival Coles now accounts for 860 stores.

Simplification strategy

Woolworths had simplified the way it worked, with key management changes and an organisational structure better aligned to strategic priorities, Ms Bardwell said.

“We announced the… consolidation of a number of businesses internally to improve performance and elevate focus on our cornerstone food business,” she said.

As part of the new management structure, Woolworths Retail – combining supermarkets, Metro stores, Greenstock and Own Brand – now comes under the management of Annette Karantoni, managing director, Woolworths retail.

“The reorganisation has brought our own brand and red meat businesses together with Woolworths Supermarkets and Metro, Ms Bardwell said.

“To support this, we made changes to Annette’s leadership team in July to flatten and better align our structure to our key strategic focus areas. We have also recently finalised other changes to the Group leadership to simplify our reporting structure and increase accountability and focus including consolidating previously separately managed but complementary areas under the direct leadership of key executives.”

Removal of Greenstock; management ranks slashed

As part of Woolworths ‘simplification agenda’ it closed down its separate Greenstock fresh red meat supply chain business launched in 2021, and absorbed operations back into the main company entity.

As described in this earlier article, former Greenstock chief executive Anna Speer moved on in July, as a result of that process. She now heads the WA-based Stone Axe Wagyu supply chain business.

Other senior management ranks in the Greenstock and fresh foods division business have been decimated as part of Woolworths ‘simplification agenda.’

Made redundant or soon to leave the company have been Tim Dudding, commercial director for meat and seafood; Matthew Robinson, Greenstock general manager operations and processing; Rosemary Scott, GM Growth and Product; and Felicity Coventry, GM Strategic Livestock Sourcing and Producer Partnerships. Another senior executive, Woolworths supermarkets chief commercial officer Paul Harker, is said to be on ‘sabbatical leave.’  Most, but not all were put together as part of the Greenstock model.

The moves, at a time when the retail supermarket sector is under enormous cost and supply pressure for red meat, have left domestic red meat market observers perplexed.

• The Woolworths board announced a dividend of 45c, with the reduction on the prior year reflecting the decline in earnings per share.
• Coles Group shares rose from $20.76 to $23.25 following yesterday’s full year results disclosure. Woolworths shares fell from $33.50 at close of business yesterday to $28.95 a few minutes ago.