Woolies online pulls strong numbers

Woolworths has today posted strong sales numbers through its online sales channels, but the retail and grocery giant still feels threatened by cheap online stores based offshore.

Woolworths this morning posted its annual sales results for the year ending 26 June 2011, with sales up by 4.7 per cent compared to last year. According to the company's retail sales report, online sales have rocketed upwards.

"Woolworths has made substantial progress in delivering a multi-channel experience across our brands, resulting in multi-channel online sales increasing 63 per cent for the year," the company said.

It cited online properties, including Big W online, Dick Smith online and Woolworths online, as big earners, and mentioned the launch of Dan Murphy's online as another successful avenue for revenue.

Dan Murphy's online offering took off in March after the launch was delayed to dodge potential complications during the busy Christmas to New Year drinking season.

Despite Woolies' success online, the company is still tense about offshore competitors pinching customers by offering cheap imports, partly because of local taxes and regulation, but partly because the wholesale prices being offered by overseas manufacturers are more expensive than what overseas sites are offering on a retail pricing basis.

"Often, [pricing power] will see international manufacturers charging Australian retailers wholesale prices that are not only substantially higher than wholesale prices charged to overseas and online retailers, but are often also higher than retail prices charged to consumers overseas and online," Woolies told the Productivity Commission in a recent submission.

Woolworths' direct competitor Coles is also active in the online space, most recently offering online customers the ability to pick up their groceries from refrigerated storage units placed in trial Coles Express locations.