Woolworths online sales hit AU$1.2 billion

Woolworths Limited has reported over AU$1.2 billion in online sales for the financial year ending June 2014, a 50 percent boost on its online showing for the previous year.
Written by Leon Spencer, Contributor

Woolworths announced today that its online sales rose to more than AU$1.2 billion for the financial year ending June 2014, an increase of more than 50 percent compared to last year.

The Australian-listed grocery and retail giant foreshadowed a full-year online sales result in excess of AU$1 billion for FY14 in February with the release of its half-yearly results.

Woolworths Limited CEO Grant O'Brien said that the latest results reinforced the company's market leadership in the region's online retail landscape.

"We have continued our focus on maintaining our track record of building new growth businesses ... reinforcing our market leadership as Australasia's largest domestic online retailer," said O'Brien in a statement to shareholders.

"Our market-leading online offers in Australian food, Australian liquor, as well as food in New Zealand, continue to exceed our expectations, and have been supported by strong growth in our Australasian apparel business.

"Recently, we opened Australia's first full-range dedicated online fulfilment grocery store and implemented 'Track My Order' GPS functionality for supermarket online orders, improving convenience for our customers," he said.

While O'Brien is focused on building Woolworths Limited's online business, it remains a drop in the ocean compared to the company's total yearly revenue, which stands at almost AU$61.2 billion, according to its annual financial report (PDF), released today.

Woolworths Limited reported earnings before interest and tax (EBIT) for the year of AU$3.8 billion, up from the previous year's result of AU$3.6 billion. The company also reported an after tax profit for the year of AU$2.5 billion, up from last year's AU$2.3 billion.

The company — Australia's largest, and the world's 15th-largest retailer — has been investing considerably in new technology to help hold its position in the local market.

In 2013, Woolworths launched an IT transformation strategy, which has since seen it establish a new convergence infrastructure that will be the basis for a future hybrid cloud environment.

Today, the company revealed that it is using data to refine its store layouts and ranges, and identify new sites. It also announced a 10 percent increase in its Everyday Rewards program members, to 7.9 million.

"The result demonstrates that the four strategic priorities we outlined three years ago are delivering strong, sustainable growth in established parts of the business. At the same time, we are investing in opportunities to generate growth into the future," said O'Brien.

The four strategic priorities include putting in place the enablers for a new era of growth and maintaining a track record of building new businesses.

The company said it continued to invest in "next-generation" logistics and technology development over the year, including infrastructure to help drive online growth, and continued to build its supply chain capabilities via its Project Mercury II.

Meanwhile, Woolworths Limited continues to invest in the digital side of its business, according to O'Brien.

"We continue to put in place the enablers for a new era of growth," he said. "We have commenced Mercury II to drive the next phase of supply chain enhancements, and our 50 percent ownership of Quantium is allowing us to use data to better tailor the shopping experience to the needs of our customers."

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