Finance Finance News Woolies warns of profit plunge

Woolies warns of profit plunge

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Woolworths is warning its first half profit could plunge by up to 35 per cent after first quarter food and liquor sales rose by just 0.4 per cent to $11.1 billion.

Chairman Gordon Cairns said the impact of previously announced investments would lower margins at its supermarkets and drag down first half net profit by between 28 and 35 per cent.

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During the 14 weeks to October 4, total sales fell 2.5 per cent to $15.7 billion and comparable food and liquor sales at the group’s Australian supermarkets fell one per cent.

Petrol sales declined 27.9 per cent to $1.3 billion following a drop in global oil prices and the transition of some sites to Caltex, while general merchandise sales dominated by the Big W chain dropped 7.9 per cent to $974 million.

The supermarket sector is becoming increasingly competitive, with discount chain Aldi planning to open 80 new stores around the nation.

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