The country's second-biggest supermarket chain has reported a 21% drop in earnings, which it attributes to "significant cost inflation" in the past financial year.
Australian-owned Woolworths Group reported that its New Zealand division — which includes Countdown, Fresh Choice, and Super Value — saw earnings before interest and tax of $249 million despite a 4.6% rise in overall sales.
Woolworths New Zealand managing director Spencer Sonn said it had been a "challenging year" as it faced high inflation "no different" to its customers.
"The past year has been characterised by high inflation and we have not been immune to that. We know our customers have been facing cost challenges and, as a business, we are no different," he said.
"High global inflation, ongoing supply chain issues and, closer to home, devastating weather events have all had a material impact on our business and affected our performance during the year."
Pierre van Heerden says he's "excited and passionate" about his new role. (Source: 1News)
Woolworths Group chief executive Brad Banducci said the business expected the "environment to remain challenging" as people cut back on non-essential items.
"We expect food inflation in Australia and New Zealand to continue to moderate but will likely remain elevated in some packaged categories," he told investors.
"We also expect the consumer environment to remain challenging with customers continuing to cut back on non-essential items."
Last month, Woolworths New Zealand announced a $400 million renewal project, which included rebranding Countdown stores to Woolworths and refurbishing older stores.
It comes as the new Grocery Commissioner gears up for a five-year term after the Government indicated it wanted to rein in the country's supermarket duopoly.
"As the global cost of living crisis continues to put pressure on families, his appointment is a significant one to hold the sector to account," Commerce and Consumer Affairs Minister Duncan Webb said last month.
Sonn said today that the Woolworths Group remained committed to New Zealand.
"We are committed to continuing to invest in New Zealand including accelerated spending of $400 million to renew our 191-strong store and distribution centre network to make shopping with us better for customers and working with us better for our team.
"This will also build a more sustainable business in the long term for all stakeholders."
SHARE ME