Woolworths has recorded a net loss of A$1.23 billion for the 2015-16 financial year, with food and petrol earnings before interest and tax down 40.8 percent.
Brad Banducci, Woolworths Group CEO, said FY16 was a year of “unprecedented change for Woolworths”.
“The decisions we have taken and investments we have made have had a material impact on our FY16 results but have been necessary to begin the rebuilding of Woolworths,” Banducci said.
During the year total sales fell by 1.2 percent, however, sales (excluding petrol) increased 0.6 percent. Australian food sales for the year were $34.8 billion, a decrease of 0.2 percent on the previous year while comparable sales declined by 1.3 percent.
Comparable sales in the fourth quarter were reportedly the strongest for the year driven by strong comparable transaction growth. However, underlying earnings from Australian food and petrol were down 40.8 percent on last year to $1.76 billion.
Banducci said the company invested more than $500 million in FY16 in reducing grocery prices, with average prices 2.3 percent now lower. A total of 1580 products will be part of its ‘Price Dropped’ program by the end of the year.
“Top of my five priorities is getting our customers to put us first and making the right business decisions to enable this to happen.
“We are regaining competitiveness with improving customer metrics and sales and transaction growth demonstrating our customers are recognising our investment in lower prices, better service, fresh fruit and veg and improved store experience.”
Woolworths’ petrol sales were down 18.1 percent on the previous year to $4.6 billion. Volumes decreased by 9.1 per cent.
The supermarket giant said sales were impacted by changes to the Woolworths – Caltex alliance in FY15 where sales from 131 Caltex operated sites were no longer recognised by Woolworths, and declining average fuel sell prices.
Comparable petrol sales (dollars) decreased 11.8 percent for the year due to the impacts of declining global oil prices and a decline in comparable volumes of 2.4 percent.
“While we are seeing early signs of momentum, we are not underestimating the size of the task that lies ahead, especially given the highly competitive nature of the markets in which we operate,” Banducci said of the company’s three to five year strategy.
Woolworths Chairman, Gordon Cairns, said: “We have addressed a number of key issues during the year to position the business for the future and we are making good progress. We are rebuilding our team with a number of key hires during the year with more to come. We are confident of further progress in FY17 and are on track in our three to five year transformation.”