Woolworths delivers profit for NZ business

Photo / Greg Bowker

Australian retailer Woolworths Ltd has increased earnings in its New Zealand supermarket business by 17.3 per cent in a year in which supermarket buying power has been criticised.

The owner of Countdown and Woolworths supermarkets reported earnings before interest and tax of $NZ244.1 million here, up from $NZ208.1m last year.

It competes with Foodstuffs, a co-operative which operates New World and Pak'n'Save stores.

"We have made progress in reducing the price differential between our business and the equivalent offering from our main competitor," Woolworths said.

It also attributed the profit to its move to the single Countdown brand. Three new Countdown stores were added during the year in addition to 33 refurbishments.

The company said 68 per cent of its stores are now branded Countdown and customers are responding as sales in rebranded stores are higher than in average sales growth for New Zealand supermarkets.

The company has been improving its range, developing exclusive brands and improving in-stock positions.

It had improved shelf stock availability and reduced shrinkage.

The company had annual sales of $NZ4.957 billion in New Zealand, up 4.6 per cent on last year.

The Green Party has said fruit and vegetable growers face ruin because the two giant supermarket chains are using their powerful position to put the industry at risk.

The shares of parent Woolworths jumped 7.4 per cent when it reported a 10 per cent rise in profit to $A2.02b ($NZ2.78b).

The company also owns Dick Smith consumer electronic stores.

It said its consumer electronics New Zealand business experienced a 12.1 percent fall in same store sales and earnings before interest and tax fell as consumer spending tightened here. The business had lower margins.

- NZPA