‘Eye off the ball’: Woolies lays blame for limp results
Cost-of-living pressures, price cuts and workers’ strikes have led to “disappointing” earnings for the country’s largest supermarket chain.
While Woolworths recorded a decline in earnings in the 2024/25 financial year, sales rose 3.6 per cent to $69.1 billion but remained well below expectations.
Scott Perkins, chairman of the supermarket giant, said the results reflected a series of challenges.
“I would like to make it clear to all shareholders that neither your board nor the management team is satisfied with the recent performance,” he told shareholders at the company’s annual general meeting on Thursday.
“We have left behind a period where our teams were distracted by external factors such as a series of regulatory investigations, industrial action and CEO turnover.”
Mr Perkins added that Woolworths was also adapting to a “new normal of intensifying competition”, on the same day its chief rival Coles reported faster sales growth in the first quarter of the new financial year.
The supermarket giant also faces losses of more than $100 million after distribution center workers went on strike for 17 days at the end of 2024.
Mr. Perkins acknowledged the focus was on a variety of external events that affected customers’ confidence in the grocery giant’s pricing.
“(We) took our eye off the ball during a period of pretty dramatic change… and the customer changed their buying patterns pretty significantly during that period,” he said.
Amanda Bardwell, who attended the first general meeting as chief executive, said cost-of-living pressures continued to put pressure on household budgets and had people hunting for bargains.
The supermarket increased its sales by 2.7 percent to $18.5 billion in the first quarter of the 2025/26 financial year.
Its growth has lagged behind chief rival Coles, where sales rose 3.9 percent to $10.5 billion.
“I want to acknowledge that this performance was disappointing and well below our expectations,” Ms Bardwell said.
“We want to be customers’ first choice for the freshest Australian food.”
The issue of salmon farming was raised at the meeting for the second year in a row, as executives faced a barrage of questions about the supermarket’s decision to continue selling farmed salmon.
Fish farming practices in Tasmania’s Macquarie Harbor have been accused of threatening remaining wild populations of the endangered Maugean stingray, which lives exclusively in the water body.
The supermarket has been criticized by many shareholders for continuing to label salmon products from Macquarie Harbor as “responsibly sourced” despite rival Coles removing the statement from its packaging.
More than a third of shareholders voted in favor of Woolworths identifying and reporting the impacts of the farmed seafood it sells, while 14 per cent supported a motion for the company to comply with a global best practice standard.
Phoebe Rountree, of ethical share trading platform SIX, said the vote sent a strong message that Woolworths needed to take nature risks more seriously.
“This is the message from shareholders today and investors will be watching them very closely to see how they react to this vote,” he told AAP.
Mr Perkins said the company relied on information from the University of Tasmania showing the skate population had reached its highest levels in a decade.
“However, if the evidence changes, our stance will also change,” he said.
“This is not a crusade by Woolworths.”
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