Woolworths Group profit plunges staggering 93 per cent after supermarket giant rocked by controversy over past year
Woolworths has seen its profit plunge by a staggering 93 per cent after the supermarket giant faced intense scrutiny over the past year.
Woolworths Group has suffered a whopping profit drop during the 2024 financial year after grappling with unhappy customers doing it tough amid the cost-of-living crisis.
In the 12 months up to July 1, Woolworths Group, which includes BigW, Milkrun and its New Zealand grocery arm, saw nearly $68 billion in sales, up three per cent from the previous financial year, and $108m in profits after tax, which was a 93 per cent reduction on its 2023 financial year result.
The drop came from the supermarket giant’s poor performance across the Tasman where earnings in the New Zealand arm fell 57 per cent, a $1.5b loss, while its investment in Endeavour Group, which operates Dan Murphy’s and BWS, resulted in an overall loss of about $100m.
Without these impairments on the grocery chain, the group’s profit dropped just 0.6 per cent compared to FY23 with a $1.7b profit.
Shoppers over FY24 have seen some relief at the checkout as average prices in the three months to June fell by 0.6 per cent while prices dropped 0.2 per cent in the first three months of the calendar year.
The good news extended to shareholders who took home a $1.44 dividend per share, jumping 38.5 per cent from the 2023 financial year.
Outgoing Woolworths Group CEO Brad Banducci addressed the company’s earnings on Wednesday morning, as he acknowledged the turbulence the supermarket giant, alongside rival Coles, faced over the year.
A Greens-led Senate inquiry demanded the major players be broken up and called for the Australian Competition and Consumer Commission to punish supermarkets that engage in price gouging and break up the major players.
Meanwhile, the Woolies boss himself came under scrutiny at the start of 2024, after he walked off an ABC interview to talk with his staff before returning to face the rest of the questions.
“I’ve been through the highs and lows and I wouldn’t change any of it,” Mr Banducci said on a media call.
“The way we’ve approached all of these inquiries is to find the good in them and to find actions coming out of them that we can or should take.
“So we’ve tried to lean into it and … we have taken actions out of it.”
Mr Banducci also touched on how the company reacted to customers tightening their belts amid the cost-of-living crisis.
“After a strong first half, we worked hard in H2 to address rapidly changing customer expectations,” he said in a statement to the ASX.
“Looking ahead, improving customer scores, item growth and lower inflation provide reason for optimism.
“However, we also know that our customers remain under significant mortgage and rent-related financial stress and anticipate them to remain cautious, with the trading environment expected to be challenging for the rest of the financial year.”
Since announcing its results, the supermarket giant’s share price is up more than two per cent.
Woolies’ profit posting comes a day after Coles announced a $1.1b during FY24, up 2.1 per cent from the previous financial year.
Sky News Business Reporter Ed Boyd noted Coles' massive result came alongside a sign that inflation was steadying after skyrocketing during FY23.
“In their (Coles) results today they showed that in the previous financial year inflation was 6.7 per cent across Coles supermarkets. In other words, prices went up almost seven per cent over a 12-month period,” he told AM Agenda.
“But in their results today they’ve (showed) that inflation has moderated to about two-and-a-half per cent in the most recent financial year… and in the fourth quarter, which is the three months to June 30… inflation fell to one-and-a-half per cent.
“In other words, inflation is moderating in Coles supermarkets.”