Woolies digital, loyalty and ecom strategy delivering results in H1 FY21
Woolworths Group has reported strong sales across all businesses in first half FY 2021 financial figures, with the exception of hotels.
Group sales increased by 10.6% in H1 (Q2 9.0%) with the Australian Food, BIG W and Endeavour Group (BWS, Dan Murphys and hotels) divisions all reporting sales growth well above trend.
Group e-commerce sales increased by 77.9% to $2.9 billion in the half. Average weekly traffic to Woolworths digital assets also increased materially, up 62.4% to 20.2 million visits per week, as customers increasingly look to engage digitally.
Woolworths reported weekly visits across its website and app reached 12.4 million per week, an increase of 69.8% vs Q2 FY20. The Everyday Rewards app downloads now exceed 3.9 million.
Enhancements to the Woolworths app during the half included new in-built capabilities such as aisle navigation, smarter lists and scan and go integration.
The financial results cited that there was “more to do to accelerate digital and improve the ecom customer experience and operating efficiency”.
During the half, customer loyalty platform Everyday Rewards was refreshed and formally launched in Tasmania where a legacy program had been in place previously. The membership base grew to 12.8 million by the end of December, and scan rates at Woolworths Supermarkets increased to 50.8%.
Everyday Rewards also partnered with Origin Energy and Bupa, to reward customers with points on new electricity and gas plans, and health insurance respectively.
The My Dan’s loyalty program continues to grow with members reaching a record 5.1 million at the end of December, an increase of 26% on the prior year.
Australian food total sales for the half increased 10.6% to $23.4 billion, with comparable sales increasing 9.3% (9.6% ex Tobacco). Sales benefited from COVID-related demand as well as the Disney+ Ooshies campaign in Q1 with sales growth moderating gradually from Q1 (12.9%) to Q2 (8.3%) as COVID restrictions eased.
BIG W X sales increased by 120% in the half and 91.0% in Q2, in part due to increased demand for home delivery and pick up with record e-commerce penetration of 9.5% in the half.
The Endeavour division increased total sales by 19% to $5.7 billion, with comparable sales increasing 17.5%. In Q2, total sales grew 17.0% with COVID “continuing to drive elevated in-home consumption” and trading up, although at more moderate levels than the previous two quarters as restrictions for on-premise venues were eased. Christmas trading was exceptionally strong, with “record- breaking sales” in the week before Christmas in both Dan Murphy’s and BWS.
While the group had previously indicated that we were targeting calendar 2021 for a potential separation of Endeavour Group. Our plans are progressing well, with June the most likely date. Further announcements on timelines and other relevant details will be made in due course. Reflecting our strong result and confidence in the group to continue to deliver for all of our stakeholders, the Board has declared a dividend of 53 cents per share, up 15.2% on the prior year.”
The resulted stated that there was “progress in scaling up Cartology”, Woolworth’s digital and retail out-of-home division, along with Woolworths International and Woolworths@Work during the half.
Woolworths Group chairman, Gordon Cairns, said: “Over the last six months we have delivered a strong result for our customers, team, supplier partners and shareholders, while still making progress on our longer-term strategic priorities.”
