| Dear “uninformedinvestors.com” It is two years since the onset of grocery inflation and with significant cost of living pressure being experienced by many households, it felt opportune to provide an update on this critical part of the family budget. |
| What exactly is happening to grocery inflation? Based on our internal data, grocery inflation peaked at 10.5% in November 2022 and remained stubbornly high until March this year. Since then, inflation has thankfully started to come down, with vegetables, fruit and now red meat (esp lamb) all in deflation. Last week at Woolworths, grocery price inflation as experienced by customers at the checkout was 3.4%. While the trend is encouraging, we fully appreciate that customers want, and need, to spend less with us, given all the other pressures on household budgets. |
| What are we doing to help you spend less? Our commitment is to actively help you spend less and we have an extensive program in place to do that. Specifically, I wanted to call out: |
| • Low Prices You Can Rely On – with our Own Brands Over the last two years, we’ve been very focused on making sure that our Own Brands really do deliver in terms of great value and at the moment, you can save up to 40% when compared to the same products from market leading brands.• Prices Dropped on Seasonal Essentials, especially Protein In the past two months, we’ve dropped the price of 80 key red meat products, most recently with an additional 20% off all standard cuts of lamb. Our customers have definitely noticed, with lamb sales growing strongly (especially our famous Lamb Leg Roast, now $8/kg, its lowest price since 2018).• (Many) More Ways to Save through Everyday Rewards Everyday Rewards Members can save hundreds of dollars every year with bonus points offers (or Boosts as we call them) and we’ve recently taken the step of introducing Member Prices in store and online, for immediate savings at checkout – simply by scanning your Everyday Rewards card. Watch this space as our Member Price program expands and evolves… |
| Is our focus on technology (and prices) coming at the expense of our Team? Self-service checkouts and the perception that this results in a reduction in team members in-store is a passionate dinner table topic in our house. The fact is, we employ more people than ever before and, with the popularity of online ordering, this year we’ve hired 5500 Personal Shoppers, so there’s more jobs at Woolies not less. |
| On a related topic, a minority of customers are treating our team badly. During the pandemic, our team members were often considered frontline heroes. Sadly, that goodwill has fallen away and, while the vast majority of customers do the right thing, we’re seeing an unacceptable rise in team abuse. There’s no excuse for this behaviour in our stores or any workplace. We thank all our customers who treat our team with respect and kindness. |
| The Bottom Line… While grocery inflation is coming down, and we have lots of exciting initiatives in train, we still have work to do to help you spend less this summer and we are committed to provide you with the ability and options to do so. Thank you for making us better together. |
| Brad Banducci CEO Woolworths Group |
ASX,WOW, A Grocery Inflation Update, from Woolworths CEO, Brad Banducci
