By Andrew Starke

Woolworths has posted sluggish second-quarter sales growth with lower than expected food price inflation and the absence of the Rudd government handouts the main factors.

Sales rose 4.1 percent to $13.8 billion for the three months ended January 3 from $13.3 billion a year earlier.

The local supermarket business, the company’s biggest division, rose 5.9 percent from $8.6 billion to $9.1 billion in the quarter.

Revenue for the Australian hotels unit, the nation’s biggest pub owner, fell 1.4 percent from $292 to $288 million.

Woolworths CEO and managing director, Michael Luscombe, said the company was pleased with the result, which he said reflected Woolworths’ clear focus on delivering sustainable growth.

“In Australia, this quarter’s sales result is a strong indication of the positive impact of the Australian Government’s stimulus package in 2008, which underpinned high consumer confidence during the global economic downturn and helped to safeguard jobs across the retail industry,” he said.

Over the half year, Woolworths reported that its Australian food and liquor business had continued to grow both volume and market share.

Fourteen new supermarkets were opened over this time (27 weeks to January 3), while ten new Dan Murphy’s were added nationwide, taking the total number to 114.

Woolworth’s shares were trading at $26.91 at 2pm today (Feb 2) compared to $27.50 seven days ago.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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