Woolworths profit falls as it grapples with unhappy customers

Supermarket giant Woolworths has seen its profits dip after being hit by falling sales in the second half, but its shareholders have been rewarded with a special dividend.

The supermarket giant posted a 0.6 per cent fall in profits before significant items to $1.7 billion. The company announced a special dividend of 40 cents per share, resulting in a total dividend of $1.44 cents per share for the 2024 financial year.

Outgoing chief executive Brad Banducci said the business lowered prices in its supermarket and Big W businesses as it grappled with lower customer satisfaction scores and lower sales in the second half, but there was improvement in the last quarter.

“After a strong first half, we worked hard in [the second half] to address rapidly changing customer expectations,” Banducci said in a statement.

“Looking ahead, improving customer scores, item growth and lower inflation provide reason for optimism.

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“We also know that our customers remain under significant mortgage and rent-related financial stress and anticipate them to remain cautious, with the trading environment expected to be challenging for the rest of the financial year.”

Overall sales for the group ticked up 3.7 per cent to $67.9 billion for the 2024 financial year. Food sales rose similarly (3.7 per cent).

Prices at the country’s largest supermarket fell 0.2 per cent and 0.6 per cent in the third and fourth quarter, marking the first time prices at Woolworths have fallen since the first half of 2022, as the supermarket passed on lower costs to customers, particularly in fruit, vegetables and meat.