Australia news live: Ooshies trend sees profit boom for Woolworths; productivity commissioner says ‘line was crossed’ by WA premier in GST scuffle
Woolworths' net profit has boomed 18% to $1.14bn as customers face cost-of-living pressures, the company has reported. Supermarket sales were up 4.6% in the year to June, its annual results today show.
Intelligence analysis by Llama
Woolworths' sales accelerated since the start of July as the company brought in its Ooshies collectibles promotion, to run 7.6% above the prior year. The company estimates the Ooshies program alone accounted for about a quarter of that growth rate.
Woolworths, a big supermarket company in Australia, made a lot of money last year. They did this by selling special toys called Ooshies, which people really liked. But some people are worried because they think the company is making too much money while others are struggling to afford things.
Analysis
Woolworths' Profit Boom: A Result of Ooshies Collectibles Promotion?
Woolworths' net profit has boomed 18% to $1.14bn as customers face cost-of-living pressures, the company has reported. Supermarket sales were up 4.6% in the year to June, its annual results today show. The company estimates the Ooshies program alone accounted for about a quarter of that growth rate. The Australian supermarkets division increased the profit margin on its earnings from to 5.5%, from 5.3%. Its pre-tax earnings rose $232m to exceed $2.95bn. Woolworth's strong result was helped by Big W returning to profit in the year, with pre-tax earnings of $64m, from a $33m loss the year before. However, the department store chain has seen its sales decline in the last eight weeks, despite its inclusion in the Ooshies program. Woolworths attributed the drop to "ongoing cost-of-living pressures on households, particularly budget customers and weaker trade in the Everyday business".
Productivity Commissioner's Stance on GST Deal
Angela Jackson, the commissioner of the Productivity Commission, said the body stands by the interim report into the GST, which found the deal with Western Australia to be a costly mistake that should be reversed. Jackson spoke to RN this morning after WA premier Roger Cook said "east coast clowns" didn't understand the state and any changes would "rip $6bn out of the Western Australia economy". The prime minister said earlier this week there would be no change to WA's GST share while he is in power. Jackson told RN Cook's comments were unacceptable: "We are aiming, of course, to inform public policy debate, which can often get heated. Our view is that a line was crossed in terms of the nature of those comments from the Western Australian premier last month. We welcome debate and we welcome criticism of our work and our report more."]
Key points
- Woolworths' net profit has boomed 18% to $1.14bn
- Supermarket sales were up 4.6% in the year to June
- The Ooshies collectibles promotion accounted for about a quarter of the growth rate
- Big W returned to profit in the year, with pre-tax earnings of $64m
- The department store chain has seen its sales decline in the last eight weeks
If the Ooshies promotion continues to be successful, it could lead to more people shopping at Woolworths and buying their products, which could help the company grow even more. Additionally, the productivity commissioner's stance on the GST deal could lead to changes that benefit Western Australia and its people.
However, the decline in sales for Big W, Woolworths' department store chain, could be a sign of bigger problems for the company. If they can't adapt to changing consumer habits and cost-of-living pressures, they might struggle to stay profitable.
