For Woolworths, Food prices are still rising and are expected to continue to rise due to the Ukraine conflict and Russia’s actions against Ukraine.
On Wednesday, Australia joined the UK and the US in slapping sanctions against Russia for its actions in Ukraine. This caused oil prices to spike.
Inflation was expected to continue to increase due to the rise in oil prices.
Aside from Russia, the rise in construction costs was contributing to the price increases.
The cost pressures that retailers are experiencing are caused by various factors, such as the construction of new stores and distribution centers.
Woolworth’s sales grew by 8 percent in the first half of the year, but due to the effects of the COVID-19 costs and the stock shortages, its earnings declined by 7.6 percent.
The company’s profit before interest and tax fell 11 percent to almost $1.4 billion due to the impact of the Big W‘s virus disruptions.
Its normalised net profit declined by 6.5 percent to $795 million.
The company’s interim dividend was cut by 26 percent to 39 a share due to the absence of 13 related to the Endeavour acquisition.
The company’s earnings from its Australian supermarkets declined 7.6 percent in the December half, but that was better than the analysts’ expectations.
The price increases in the retail sector were expected to be about 3 to 4 percent next month. This is the highest level of inflation that non-food retailers have experienced in the past couple of decades.
COVID-19 costs grew to $239 million in the half year, which is higher than the $150 million that Coles spent in the same period.
Several analysts were worried about the company’s ability to control its costs in the second half of the year.
The company was still experiencing cost blowouts and attributed the higher costs to the company’s increased spending on COVID-19-related items, such as rapid antigen testing.
It’s Insurance offers are performing well and are not affected by the same issues. You can get great priced insurance from Woolworths Insurance with a Everday Insurance promotion code.