Woolworths Group has reported a strong rise in grocery sales, even as it revised its profit outlook downward due to rising fuel costs and global supply chain pressures linked to escalating tensions in the Middle East.
The company recorded a 4.5% increase in group sales for the last quarter, reaching $18.1 billion, while its core supermarket division grew by 5.9%. Despite these gains, the outlook for the remainder of the financial year has weakened.
Woolworths said higher petrol prices and increased logistics costs are putting pressure on profit margins, with fuel costs rising as global oil prices climb amid ongoing geopolitical instability.
Chief executive Amanda Bardwell explained that while the direct impact has so far been limited, the broader effects of higher transport and energy costs are expected to increase inflationary pressure in the months ahead.
The company noted that although supermarket profits are still expected to rise for the full year, they will no longer reach the upper end of previous forecasts.
Interestingly, the retailer is also seeing customers purchase more items overall, with analysts suggesting that shoppers are buying more carefully and relying on loyalty programs to manage rising living costs.
Markets analyst Kylie Purcell said this trend reflects a shift in consumer behaviour, where households are becoming more value-conscious while still maintaining overall spending levels.
Meanwhile, Woolworths is facing increased scrutiny as the Australian Competition and Consumer Commission (ACCC) investigates supermarket pricing practices amid concerns over discount transparency.
In response to cost-of-living pressures and public concern, Woolworths has also announced a price freeze on 300 essential household items, including bread, meat, and nappies, aiming to support customers during a period of economic uncertainty.
