The latest quarterly results from the two major retailers reveal Australian shoppers preferred Woolworths to Coles in the March quarter as shopping patterns return to normal and promotional activity picked up.
Woolworths same-store food sales fell 2.1% in the quarter to March, after rising 10.3% in the prior year comparable. Online food sales soared 90.5% to $878m for the period, reaching 7.9% of sales compared to 4.1% of sales a year ago. Supermarket sales rose 10.6% to $23.4bn, with demand for food and groceries remaining elevated amid sporadic lockdowns. Woolworths MD and CEO Brad Banducci played down speculation of a price war, saying the market continued to be very rational on price. Woolworths’ prices – excluding tobacco and fresh food – fell 2.4% in the quarter, although promotional activity would pick up after being put on hold last year.
Meanwhile, Coles’ same-store food sales were down 6.4%, after jumping 13.1% in the March 2020 quarter, while total sales down 5.1% for the period. Online food rose 49%, accounting for 5.5% of sales. Coles is regaining market share lost to Metcash and Woolies during lockdowns as consumers return to shopping centres and CBDs.
In April, Woolworths’ Australian food sales were flat, while Coles’ food sales rose about 4%, indicating Coles may have gained market share as shoppers headed back to malls, where Coles is more exposed, and away from small stores such as those supplied by Metcash. Woolies shares slipped 3.5% to $39.96 after the announcement Wednesday, while Coles shares rose 3% to $16.35.