Dick Smith continues to slide as ‘for sale’ sign hangs hard.
Click to enlarge
Woolworths announced third quarter sales results of $13.7 billion across all divisions, a rise of 3.9% on the 2011 figure.
However, this sales growth (for food, petrol and home improvements) figure for the 13 weeks ending ended 1 April ’12 does not include its troubled Dick Smith chain – now classed as ‘Discontinued Operations’ after Woolies announced it was putting the retailer up for sale, earlier this year.
Dick Smith’s total sales across Australia (and N Z) fell 0.3% to $356 million in Q3.
However, despite the “for sale” sign now hanging on Dicks, its total comparable sales showed a slight rise to 0.6%
Breaking this down, Dick Smith Australia sales decreased 1.7% to $296 m, across the ditch, NZ sales increased 2.7%2 to NZ$77 m.
Woolies’ other electronics retailer, Big W, told a different story: sales were $931 million, an increase of 1.4% on last year, for Q3.
Big W showed continued improvement in sales, customer numbers and items sold although poor summer weather impacted growth.
This figure also marks good news for Big W, one of the biggest seller of Apple in Australia, as sales dipped 1.3% for the first half of the financial year.
The discounter also added two new stores to its network as did Dick Smith, although it shut a further 12 DS during the 13 week period.
Customer numbers and items sold increased during the quarter for Big W, although price deflation continued, averaging 5%, Woollies said today. The primary cause of deflation is the stronger Australian dollar with cost price reductions passed onto customers.
Strong sales were recorded in Toys, Books and Cosmetics; although there was no mention of how CE sales fared. Cooler weather had an effect on sales in seasonal areas such as outdoor, aquatic and cooling.
“The continued growth in customer numbers and items sold were pleasing. This is evidence of BIG W’s strong value proposition – offering the lowest prices on thewidest range of quality and branded merchandise every day,” Julie Coates, Director BIG W said.
“Sales have been assisted by the six new stores that we have opened this year. We opened two new stores during the quarter bringing total stores to 171. We plan to open an additional store in thefinal quarter of the 2012 financial year.”
On multi-channel sales, which every retailer seems to be getting it knickers in a twist over, of late, here’s what Woolies had to say:
“The online component of our multi-option growth strategy continues to progress at pace and remains a key focus.
“Our latest additions and enhancements include, the Supermarkets mobileshopping app, a virtual shopping wall, the BIG W mobile app, click then collect trials and a newgeneration supermarket online platform. We also launched the Door Buster daily deals site duringthe quarter. The fourth quarter will see the launch of the Masters Home Improvement transactional website.”
And these multi-channel efforts are paying off, it appears and contributed to mammoth online sales growth of 108% (although this figure fell to 45% excluding Cellarmasters) for Q3.
CEO Grant O’Brien said the latest results were “pleasing ” despite tight consumers spending and deflation:
“Woolworths has posted a pleasing sales growth figure of 3.9% for continuing operations. This has been achieved in a continuing tight consumer market. I stated at the half year that there were two key factors impacting the third quarter sales outcome: cycling the natural disasters of 2011, and accelerating deflation.
“In addition to these factors, sales were affected by an unseasonably cold and wet summer period during which some States, such as NSW, experienced their wettest months in more than 50 years.”
“However we were pleased with continued growth in customer numbers, market share and units sold and the growing momentum of key initiatives.
“Whilst the quarter saw an improving sales trend, we continue to remain cautious about the sales outlook for the fourth quarter, particularly given consumer and business uncertainty about the impact of the carbon tax and interest rates.”