Woolworths has reported a 10 per cent jump in food sales at its Australian supermarkets for the third quarter, due to panic buying amid the coronavirus pandemic.
The retail giant reported food sales of $11.1 billion for the 13 weeks to April 5, which is a comparable growth of 10.3 per cent.
The result falls short of the growth experienced at chief rival Coles, which on Wednesday reported an unprecedented 13.1 per cent sales growth and $8.23 billion in third quarter supermarket revenue, albeit off a lower base.
Woolies said supermarket sales growth peaked at 40 per cent in the week ended March 22.
Toilet paper, cleaning goods, rice and pasta were the most popular items for the period, with shoppers often stripping shelves of these goods, prompting management to ask for extensions to delivery curfews and temporarily suspending online ordering.
Online supermarkets sales climbed 26.5 per cent to $461 million, although this increase was not as high as in previous quarters, due to online ordering being suspended in March because of lack of supply.
Woolworths chief executive Brad Banducci said the last four months had been one of the most challenging periods in the company’s history.
Food sales in New Zealand jumped 13.4 per cent to $1.8 billion.
Sales at Big W climbed 9.9 per cent to $866 million, and sales at liquor stores – which include BWS and Dan Murphys – rose 8.9 per cent to $2.2 billion.
Big W is on course for a small profit at the end of the financial year, the company said.
Liquor sales grew substantially in March – when social distancing measures were introduced – although Woolies said this growth has since eased.
Woolworths’ hotels recorded a 2.4 per cent rise to $350 million, despite being closed from March 23 due to social distancing restrictions.
However, its 327 venues will make a loss before interest and tax of $30 million to $35 million per month while they remain closed.
Overall group sales climbed 10.7 per cent to $16.5 billion.
Woolworths said sales growth in April has moderated compared to March.
The many measures put in place to cope with the earlier sales boom will cost between $220 million and $275 million in the fourth quarter.
About 22,000 temporary staff were hired and continue to ensure social distancing, improved warehouse operations, security and cleaning.
Management hopes sales can offset these costs.
Mr Banducci said the outlook for the rest of the financial year was uncertain, although Woolworths is in a strong position.
Permanent `front line’ staff such as cashiers will be paid a bonus at the end of the financial year due to their work during the pandemic.
Woolworths is also continuing to compensate the more than 7,000 current and former supermarket staff it underpaid, after learning of the errors last year.
These payments will be completed by the end of 2020.
Shares in Woolworths were down by 8 cents, or 0.22 per cent to $35.95 at 1322 AEST on Thursday. The stock is barely changed in 2020 compared to an 17.8 per cent fall for the ASX/200.