Woolworths Group said that while its supermarket stores continued to be impacted by COVID-19 lockdowns during the first half of the 2022 financial year, it resulted in a large customer shift towards its e-commerce platforms.
This shift is reflected in the Australian retail grocery giant's latest half-year results, with the company reporting group e-commerce sales jumped 48% year-on-year to AU$3.5 billion for the period. E-commerce sales penetration grew from 8.1% to 11.6% and average weekly traffic to group digital platforms jumped by 30.5% to AU$23 million.
"While the far-reaching impacts of COVID resulted in one of the most challenging halves we have experienced, we ended H1 strongly with positive trading momentum and helped our customers enjoy a much-needed Christmas celebration and festive holiday season," Woolworths Group CEO Brad Banducci said.
Group sales came in 8% higher year-on-year reaching AU$32 billion for the period ended 2 January 2022.
Of total group sales, its Australian food business contributed AU$23.8 billion, following a 3.4% uplift during the first half. Breaking this down, the company's digital arm, Woolies X contributed AU$2.6 million, following a 50.5% gain during the half year, with sales penetration of 10.8%. This growth helped offset a small 0.7% decline in store-originated sales that ended the period at AU$20.6 billion.
"Approximately 90% of e-commerce sales were fulfilled by the Woolworths supermarket network," the company said.
Woolworths also noted its WooliesX business saw "record visits" to its digital platforms driven by higher app usage. Active weekly app users were up 50% in December versus the prior year, while its Everyday Rewards App reached over one million weekly active users in Q2. By the end of the half, there were 13.3 million registered Everyday Rewards members.
As part of its half-year results, the company took the opportunity to highlight that it established its advanced analytics platform, Q-Retail, in partnership with analytics firm Quantum, where Woolworths holds a majority stake, and that Quantium signed deals with Telstra and Asda.
Woolworths also said that it uncovered a further one-off cost of AU$144 million in unpaid wages through a payroll review it commenced last year. This is in addition to having already paid over AU$427 million in underpayments the company discovered in 2020.
"We are disappointed to have identified further inadvertent underpayments and unreservedly apologise to our affected team members. We will continue to fix issues when we identify them and introduce the right controls to prevent them from happening again," Banducci said.
Woolworths wrapped up the half-year with group after-tax profit coming in 6.5% higher on the prior year to AU$850 million, and group earnings before interest and tax of AU$1.4 billion, down 11%.