Countdown sales rise in first quarter, boosted by dearer dairy, produce

Countdown's food price index rose 1.6% in the quarter.

Countdown supermarket sales rose 3.2% in the first quarter of the 2018 financial year, boosted by more expensive dairy products and fresh produce.

New Zealand food sales increased to $1.63 billion in the 14 weeks to October 1 from $1.58 billion in the same quarter a year earlier, Woolworths said in an update to the Australian stock exchange. In Australian dollars, sales gained 0.4% to $A1.5 billion, with the smaller gain down to a weaker kiwi dollar against its Australian counterpart.

Comparable sales rose 2.7% in the first quarter as "customers responded positively to our investment in service despite a number of competitor promotions during the period," Sydney-based Woolworths said.

Countdown's food price index rose 1.6% in the quarter, "driven by a combination of continued New Zealand dairy price inflation and higher levels of inflation in fresh produce impacted by growing conditions and supply," Woolworths said. Government figures show grocery food prices rose 1.4% in the three months ended September 30, outpacing a 0.7% increase in the broader food prices index.

Woolworths said 52 of its stores have product ranges tailored for customer demographics. There are 184 Countdown stores in New Zealand, with the company opening one and closing one in the quarter, while the number of franchise stores rose by one to 66.

The ASX-listed parent reported a 3.7% gain in total first-quarter sales to $A15.7 billion, which includes its income from its Australian supermarkets, petrol sales, the Big W chain and hotels. Excluding its discontinued petrol operations, first-quarter sales rose 3.7% to $A14.5 billion.

Chief executive Brad Banducci said the company is focused on the important Christmas trading period ahead.

The ASX-listed shares last traded at $A25.30 and have gained 5% this year.