Woolworths NZ lifts sales 2.3% in tough trading conditions

Australian chain Woolworths, which accounts for about 40 percent of New Zealand's supermarket sales, increased first-half revenue 2.3 percent on this side of the Tasman, even as trading conditions remain tough and consumer price growth was non-existent.

The group's New Zealand supermarkets increased sales to $2.94 billion in the 27 weeks ended December 30 from $2.88 billion a year earlier, the ASX-listed company says in a statement.

Total group sales rose 3.2 percent to $A30.68 billion, including a $A642 million contribution from its Dick Smith Electronics stores, which it sold in the period.

"In a market characterised by low growth and even lower inflation, retail trading conditions have become increasingly challenging," says David Chambers, managing director of local supermarket unit Progressive Enterprises.

"Our strong brand, new store formats and continually improving offers have enabled us to continue to increase our market share throughout the half."

Woolworths New Zealand, the local holding company, boosted annual profit 29 percent to $128.9 million in the 2012 financial year on a 3.5 percent increase in sales, according to documents lodged with the Companies Office.

Those earnings gains have come in a period when inflation is easing, and government figures this month showed the consumers' price index fell 0.2 percent in the December quarter.

The Countdown Supermarkets food price index showed inflation of just 0.1 percent in the six-month period, with second-quarter deflation in dairy products.

Woolworths says it passed on lower costs of milk, butter and cheese to its customers, and held more frequent promotions.

Shares in the Australian group fell 1 percent to $A31.35 on the ASX today.


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The profit power of a duopoly...

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The Countdown brand even as of today continues to "scr*w" its customers with continual price increases. There is no other need for these rises other than to increase profits, (the fat cat is just getting fatter!). The interesting thing about this is that Pak'n'Save follows the Countdown prices, if you keep an eye on them. PNS are followers and they keep their prices 2c below the opposition, and that simply does not stack up in the comparrison stakes, and they don't put out a weekly mailer. Another thing, too, is the Countdown weekly mailer. Come Monday, PNS undercuts every price in it by a couple of cents per item. Have you ever seen PNS dominate and lead a fuel discount offer? No ,they just follow. And don't be fooled people, those fuel discounts are already factored into the prices that you pay. The supermarket prices are so cranked up these days that even on "special" they are still getting a normal full retail profit -don't be fooled.
I could write on here for hours re this as it is shocking, and I feel desperately sorry for the family which is really scr*wed by these giants.

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