Woolworths reports strong start to FY21 as online sales and net profit experiences uplift

The digital arm of its Australian food business saw online sales jump 92% during the period.

Woolworths has revealed that customers increasingly continued to purchase via online channels during the half year to 31 December 2020.

The Australian supermarket giant revealed that group ecommerce sales reached nearly AU$3 billion, after seeing a 78% uplift on the AU$1.65 billion reported last year. Online sales penetration for the half grew 8.2%. 

Woolworths also reported average weekly traffic to group digital assets increased materially, up 62.4% to 20.2 million visits per week, which it said was due to "customers increasingly looking to engage digitally as part of their shopping journey".

Looking more specifically at the digital arm of the company's Australian food business, WooliesX, online sales saw a significant jump of 92% to AU$1.8 billion in the half. This represented 7.7% of its Australian food business sales that came in at AU$23.5 billion for the period.

During the half year, Woolworths established three new dedicated ecommerce fulfilment centres in Notting Hill, Lidcombe, and Carrum Downs. Carrum Downs was also the first estore to deploy Takeoff microfulfilment technology, which the supermarket touts was the first time in Australia.

Woolworths also boasted its Rewards app downloads exceeded 3.9 million, with total member numbers continuing to inch closer to the 13 million mark.

"Enhancements to the Woolworths app during the half -- including new in-built capabilities such as aisle navigation, smarter lists, and Scan & Go integration -- have assisted customers to shop quickly and safely. Weekly visits to all digital properties were up 69.8% on Q2 F20 to 12.4 million," Woolworths said.

Similarly, online sales continued to "grow strongly" for the group's New Zealand food business that saw a 48% boost in online sales to NZ$206 million, attributing it to "record online Christmas sales".

The lift in online activities contributed to half-year total group sales growing 10.6% year-on-year from AU$32.4 billion to AU$35.8 billion, as well as lifting net profit after tax by 16% to AU$1.14 billion. Total group earnings before interest and tax jumped 10.5% year on year to AU$2.09 billion for the half year.

Looking ahead, the company said for the rest of the financial year, there are expectations that sales will decline over the March to June period compared to the prior year, as sales level out when compared to the surge it experienced, particularly online, during the height of the COVID-19 outbreak. 

Elsewhere, Woolworths together with Fujitsu has launched its third "mini supermarket" at Black Mountain School in the nation's capital to provide students with disabilities in years 7 to 12 an opportunity to experience what work and shopping experiences could potentially look like post-school life. The other mini stores exist in St Edmund's and St Gabriel's in New South Wales.  Each mini store is fitted out with complete working scanners and registers.

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