Woolworths recorded a 3.6 per cent lift in overall sales to $69.1 billion for the 2025 financial year, but the industrial action against the supermarket in December last year and the supply chain problems that ensued created a $168 million hole, contributing to a 17.1 per cent hit to profits to $1.38 billion.
Gross margins fell by 28.6 per cent as Woolworths absorbed price inflation instead of passing it onto customers, who traded down to own-brand products and bought items on promotion. The Australian food business grew 3.1 per cent to $51.45 billion, and own-brand sales lifted 5 per cent.
Woolworths chief executive Amanda Bardwell in the Macquarie Park Woolworths store.Credit: Sitthixay Ditthavong
Meanwhile, the cost of doing business lifted to 23.3 per cent due to wage growth and superannuation. Big W, which has been struggling for a long time, recorded a loss of $35 million.
Chief executive Amanda Bardwell said the supermarket was repositioning for sustainable growth after a “highly disrupted” first half of the financial year, but acknowledged current trading levels were “below our ambition”.
“In February, we highlighted three focus areas for 2025. Most important was getting it right for our customers,” she said.
The supermarket lowered shelf prices, increased specials, absorbed price increases and made pricing easier to understand, said the chief executive. With the exception of tobacco, grocery prices at the supermarket have fallen for six consecutive quarters, with ongoing focus on value for money and availability.
Woolworths announced its latest financial results on Wednesday.Credit: Louie Douvis
The supermarket expects to return to profit growth after a “disappointing” year.
“We will continue to rebuild customer trust through compelling value and retail execution excellence, simplify the way we work and become a more focused, lower-cost retailer with a differentiated food offer at our core,” said Bardwell.
“Some of this will take time, but I am confident that the strength of our brands, assets and team can see us deliver a much-improved performance.”
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