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Woolworths reports sales fall as shoppers avoid larger malls

| Retailer trading results

Retail group Woolworths says the changes to consumer behaviour due to Covid-19 remain in place, including fewer visits to larger malls and city centres, and a reduced demand for formalwear.

The group’s Australian operations have also been under pressure as that country grapples with a second wave of Covid-19 in some states, while even as restrictions ease in SA, the pace of economic recovery is slow.

Group sales for 20 weeks to end November 15 fell 2% year on year in constant-currency terms, the retailer said in a trading update, but a weaker rand helped lift reported sales by 3.5%.

Woolworths Food remains resilient, the group said, with comparable store sales growth of 9% during the period. There has been a reduced demand for lunchtime and snacking products, with customers opting for larger pack sizes.

Woolworths Fashion, Beauty and Home remains under pressure, with the winter clearance much smaller than in 2019, while there has also been a significant drop in demand for formalwear. Comparable store sales fell 14.6% during the period.

In Australia, David Jones reported a comparable sales decline of 14.6%, and in the State of Victoria, where lockdown measures were reintroduced during the period, total sales fell 76%. 

The State of Victoria lockdown had a similar effect on Country Road Group, but this was mitigated by the shift to casual wear and online shopping, particularly for the Country Road brand, which grew sales on the previous period.

Excluding Victorian stores, which traded 76.7% down on the previous period on a total sales basis, the balance of the Country Road business grew by 6.5%, aided by online sales growth of 55.7%.


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