Woolworths has reported a 10 percent jump in food sales at its Australian supermarkets for the third quarter, due to panic buying amid the COVID-19 pandemic.
The retail giant reported food sales of $11.1 billion for the 13 weeks to April 5 – which is 10.3 percent comparable growth.
The result falls short of the growth experienced at chief rival Coles, which on April 29 reported an unprecedented 13.1 percent sales growth and $8.23 billion in third quarter supermarket revenue.
Woolies said sales growth peaked at 40 percent in the week ended March 22.
Toilet paper, cleaning goods, rice and pasta were the most popular items.
Woolworths chief executive Brad Banducci said the last fourth months had been one of the most challenging periods in the company’s history.
New Zealand’s total food sales had a 13.4 percent jump to $1.8 billion.
Sales at Big W climbed 9.9 percent to $866 million, and Endeavour Drinks rose by 8.9 percent to $2.2 billion.
Woolworths’ hotels recorded a 2.4 percent rise to $350 million, despite being closed from March 23 due to social distancing restrictions.
However this division will make a loss before interest and tax of $30 million to $35 million per month while pubs are closed.
Woolworths said sales growth in April has moderated compared to March.
The many measures put in place to cope with the earlier sales boom will cost between $220 and $275 million in the fourth quarter.
About 22,000 temporary staff were hired and continue to ensure social distancing, improved warehouse operations, security and cleaning.
Management hopes sales can offset these costs.
Banducci said the outlook for the rest of the financial year was uncertain, but Woolworths was in a strong position.
Permanent `front line’ staff such as cashiers will be paid a bonus at the end of the financial year due to their work during the pandemic.
Woolworths is continuing to compensate the more than 7,000 current and former supermarket staff it underpaid, after learning of the errors last year.
These payments will be finished by the end of the 2020 calendar year.
Shares in Woolworths were down by 2.08 percent to $35.28 after 15 minutes of trade on April 30 , but have only dropped by 0.36 percent in 2020 against an 18.3 fall for the wider ASX/200.
By Steven Deare