Countdown supermarket chain grabs more market share in first half
Australian-owned New Zealand supermarket chain Countdown boosted first-half earnings as it nabbed market share and customer numbers in what it says is a subdued environment.
Countdown's earnings before interest and tax rose 1.3 percent to $164.4 million in the 27 weeks ended Jan. 5 with sales up 2.6 percent to $3.02 billion, its ASX-listed owner, Woolworths [ASX: WOW], said in a statement. In Australian dollar terms, earnings before interest and tax rose 9.7 percent to A$136.8 million and sales were up 15 percent to A$2.67 billion, assisted by a favourable exchange rate for converting New Zealand to Australian dollars.
"We continued to increase market share, customer numbers and items sold, reflecting the relevance of our offer and success of promotional activity," the company said. "This was despite the subdued grocery market conditions, highly competitive marketplace and price deflation across a number of key categories."
The Countdown chain has been accused of anti-competitive and corrupt behaviour by Labour MP Shane Jones under the cover of Parliamentary privilege. The Commerce Commission is formally investigating the claims, which it says will take a number of months.
Countdown has previously said it will cooperate fully with the inquiry, though Woolworths made no mention of the action in today's announcement and accompanying releases.
The grocer is now New Zealand's largest supermarket chain, and continues to expand, opening two new stores in the reported period and plans to open a further five stores by the end of the financial year. It also intends to continue to reduce prices in New Zealand, according to presentation slides accompanying the release.
The Woolworths group reported net profit growth of 5.8 percent, to A$1.3 billion, beating guidance given, and marginally increased its annual forecast profit growth to between 5 percent to 7 percent on last year. Group sales grew 6 percent to A$31.8 billion in the half year under review.
Woolworths owns several Australian retailers, including the eponymous supermarket and petrol stores, retailer BIG W, clothing catalogue EziBuy, Masters hardware chain, and alcohol store Dan Murphy's.
The ASX-listed shares were recently down 2 percent to A$35.68.