Woolworths has cranked up their consumer electronic operations in an effort to capitalise on the growth being recorded by most CE retailers. In their latest report to the ASX Woolworths has recorded consumer electronic sales of over $400 million for the first quarter of FY09
Their success follows a major restructuring of their Dick Smith operations. However Woolworths have warned that the Australian market is slowing.
In the 14 week period ending 5 October 2008, Woolworths CEO Michael Luscombe said that CE sales had increased when compared with the same period last year.
“This is a good start to the financial year and particularly pleasing is the continued momentum in our Australian operations, with an overall improvement in comparable sales growth.” Luscombe wrote.
Consumer electronic sales increased from $365 million for Q1 FY08 to $408 million for the first quarter of this current financial year a growth of 11.8 per cent year on year. Last year sales grew from $347 million to $368 million, a $21 million or 6.1%.
“Consumer electronics has continued to enjoy solid growth with sales for the quarter increasing 6.1%. Comparable store sales increased by 4.9%…during the quarter, an improvement on the 3.8% recorded in the fourth quarter of 2008, reflecting an improved result from our Australian operations,” wrote Luscombe.
Overall Woolworths saw sales growth accelerate to 9.6 percent in the first quarter as food and liquor sales withstood slower consumer demand, and it maintained its full-year sales outlook.
Sales growth rose from the 7.5 percent reported in the fourth quarter, boosted by store refurbishments, the company said.
Woolworths Chief Executive Michael Luscombe said that subject to the uncertainty about discretionary spending, full-year sales growth would be in the upper single digits, as previously forecast.
Consumer spending in Australia has slowed sharply this year, but economists say there are signs confidence improved after the central bank unexpectedly slashed official interest rates by 1 percentage point this month in response to the global financial crisis.
Woolworths’ same-store sales in Australian food and liquor rose 6.0 percent, up from 4.9 percent in the fourth quarter.