Annual profits fall as strikes, Big W suffer and Coles pulls ahead
Woolworths’ share price has been hammered after Australia’s biggest supermarket chain reported a 17 per cent plunge in full-year profits, the result of a horror year marred by striking workers, supply chain problems that ensued for months, and discount department store Big W’s consistent losses.
Shareholders dumped the stock, sending Woolies’ share price down 13 per cent as its Australian food business, the heart of the company, grew sales by just 3.1 per cent to $51.45 billion in fiscal 2025. Under pressure to repair its reputation after being accused of profiteering during the cost-of-living crisis, Woolworths saw its profit margins shrink as it absorbed rising supplier prices instead of passing them on to customers, who traded down to cheaper home brands and promotions.
“Clearly it has been a challenging year up front,” said chief executive Amanda Bardwell as she presented the results for the year ended June 30 on Wednesday morning. “I want to say that we are not satisfied with our financial performance. Our results were below our expectations.”
Woolworths chief executive Amanda Bardwell in the Macquarie Park Woolworths store.Credit: Sitthixay Ditthavong
Over the year, the supermarket lowered prices, increased the number of items on special, absorbed cost increases and made pricing easier to understand, she said. Except for tobacco, grocery prices at the supermarket have fallen for six consecutive quarters, with the company saying it is focusing on value for money and product availability.
“Customers were clearly sending us the message that they were looking for more value. And what we have recognised is that we had an opportunity to move faster,” Bardwell said.
The retailer’s cost of doing business lifted to 23.3 per cent of turnover due to rising wage and superannuation costs. Big W, which has consistently underperformed and weighed on the Woolworths business, recorded a loss of $35 million.
The group is looking to move the discount department chain to a separate technology platform, which has fuelled speculation it may be preparing to spin off the struggling business. Bardwell did not respond directly to questions on whether management was readying for a Big W sale.
Big W’s underperformance weighed on Woolworths results.
“We’re recognising that flexibility for the technology platform for Big W going forward will be important,” she said.
