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.
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.