For Q3FY17, Woolworths Reasonable growth during challenging market conditions
Reasonable growth during challenging market conditions:For Q3FY17, Woolworths (ASX: WOW) reported a moderate sales growth of 3.7% year on year (yoy) to $13.8 billion, led by strong momentum in Australian food division with 5.1% yoy growth to $9.3 billion. Further, the company is expecting a significant ramp-up in supermarket renewals run-rate with 49 planned for H2FY17. During the quarter, Australian Food witnessed significant improvement in voice of customer (VOC) scores compared to Q3FY16, wherein the overall customer satisfaction and store-controllable VOC increased to 77%, 80%, respectively. Additionally, the company’s online sales posted strong growth of 20% yoy during the same period. Notably, the transaction growth remained the biggest driver of growth with comparable Easter adjusted transaction growth of 4.1%. However, average prices declined by 2.5% during the quarter, largely driven by general merchandise and grocery, while the fruit & vegetable prices were marginally inflationary. Though the meat prices continued to decline against Q3FY16 despite higher input cost prices, fruit & vegetable volume growth remained strong during the quarter. The company ended the quarter with 978 Australian Supermarkets and 23 metro food stores as it closed three and opened two supermarkets during the quarter.
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