Woolworths grows sales 4.7% in “challenging” year

Woolworths grows sales 4.7% in “challenging” year

Woolworths (ASX:WOW) has reported a 4.7% increase in FY11 sales to $54.16 billion, during what its CEO acknowledged was a “challenging” year for the retail sector.

Excluding petrol, sales grew 4.1% to $48.1 billion, while core supermarket division sales grew 4.6% to $44.29 billion.

Woolworths CEO Michael Luscombe said the company achieved the result despite “a very challenging year for retail which saw continuing deflationary effects, the disruption caused by natural disasters and higher domestic savings rates.”

The company said trading in Australian food and liquor continues to be impacted by tighter consumer sending and higher interest rates, petrol and utility prices, but that price knockdowns have kept the company competitive.

Supermarket sales were also impacted by the stronger Australian dollar against the New Zealand dollar – excluding this effect, total group sales would have grown 5.1%.

Big W sales fell 0.8% on the prior year to $4.2 billion, due to price deflation, but consumer electronics sales including from Dick Smith branded stores grew 2.1% to $1.3 billion.

In New Zealand, however, Dick Smith is facing “a very challenging macroecronomic environment,” Woolworths said, with sales falling 5.6%, or 4.7% on a comparable basis.

Woolworths' Indian joint venture with Tata Group had a stronger year, with sales up 27.8% to $322 million and the number of retail stores growing to 64.

Woolworths said its efforts to develop a multi-channel online shopping experience across its brands had led to a 63% increase in multi-channel online sales for the year. New developments include the opening of an online shopfront for its Dan Murphy's liquor brand in March.

WOW shares grew 0.73% in Wednesday's trading to $27.450.

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Tags retailrevenuefinancial resultswoolworthsASX:WOWMichael Luscombe

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