WooliesX pushes total online sales up more than 31% for Woolworths

But it wasn't enough to help the group avoid the impact of costs associated with salary remediation.
Written by Aimee Chanthadavong, Contributor

Woolworths has announced through WooliesX, the digital arm of its business, online growth remained "very strong" during the first half to 5 January 2020.

Total group online sales reached AU$1.65 billion, up 31.6% with online penetration for the half at 5.1%, up 100 basis points on the prior year. 

"As our e-commerce business matures, we continue to improve the operating performance and efficiency and are making good progress on our online fulfilment strategy which includes four e-stores (micro-fulfilment centres) to be opened this calendar year across Australia and New Zealand," the company stated.

"Delivery Now, our express delivery service is now available to over eight million customers and we are seeing strong take up of Delivery Unlimited, our revamped delivery subscription business."

The company also added the ongoing momentum experienced by its WooliesX business was underpinned by digital traffic growing by over 50% through "more personalised, effortless, and connected customer experiences", such as through the introduction of a track my order feature to enable customers to track their orders in real-time via the Woolworths app.

Woolworths Rewards grew to 12 million members, up 300,000 since the end of last financial year

See also: Mobile payments such as Apple Pay and Samsung Pay are hot, but many consumers still prefer cash (TechRepublic)

During the half year, Woolworths also expanded its Scan and Go pilot to four supermarkets and six metro stores. The pilot gives customers the chance to pay for their purchases from their phone, avoiding conventional check-out systems.

"Across the group, we will continue to scale-up the X businesses to keep pace with customers' demands and expectations," Woolworths Group CEO Brad Banducci said.

Despite the positive results experienced by WooliesX, the same could not be said for the group overall, with Woolworths reporting that due to costs in relation to underpaying salaried staff, the company saw net profit drop for the full year.

Total salary back payments that were made during the period cost the business AU$80 million. As a result, this impacted the bottom line with net profit after tax coming in at AU$887 million, down 7.7%.

Prior to the one-off costs, net profit from continuing operations grew 8.5% to AU$979 million; earnings before interest and tax grew 33.5% to AU$1.89 billion; and total sales reached tipped just over AU$32 billion, following a 6% growth.

The business estimates that wage remediation will cost the business a total of AU$315 million.

"The group is working with diligence and care to finalise the review and address the payment shortfalls to our team," the company said.

Similar wage remediation action is currently being undertaken by rival Coles, after an internal review uncovered that those who were paid a salary under the General Retail Industry Award (GRIA) -- which were approximately 5% of its supermarket and liquor store managers, or less than 1% of the Coles Group's total workforce -- were incorrectly paid

For the half-year period to January 5, Coles recorded net profit after tax of AU$489 million, and earnings before interest and tax of AU$910 million. 

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