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Woolworths posts record sales
SYDNEY, Australia (CNN) -- Australian grocery giant Woolworths has pushed full-year sales 12 percent higher to a record Aust. $26.3 billion ($17 billion) and slightly raised its earnings outlook. Woolworths, which gets 85 percent of its revenue from its supermarkets, is locked in a long-running battle for control of Australian consumer spending with arch-rival Coles Myer. Both run supermarkets, liquor outlets and general merchandise stores, with Coles also having the Myer and Grace Bros department stores. Coles usually outsells Woolworths, but the latter has been more profitable in recent years. The two retail leaders also face sharp competition from cut-price grocers such as Germany's Aldi, which has opened a number of supermarkets in Australia recently. Woolworths CEO Roger Corbett called the sales figures for the 52 weeks to June 29 an "excellent" result Monday, pointing to the 55 percent lift in petrol sales from its 287 sites, 210 of which are in its carparks or next to a Woolworths store. Offering discount petrol to shoppers is becoming a key part of the battle between the two retailers, as Coles attempts to catch up with Woolworths' head start in this field. In late May, Coles struck an alliance with global oil company Shell to offer discount fuel to Coles customers at 584 outlets, starting this month with 150 sites in Victoria state. (Full story) That move is part of Coles' turnaround strategy under CEO John Fletcher, following a bruising boardroom battle in 2002 that saw a key shareholder, Solomon Lew, voted off the board in November. Lew had been highly critical of the performance of Coles, particularly its Myer, Grace and Target stores. The Woolworths sales result was in line with expectations. The company said earlier this year it was aiming for a full-year net profit of A$631 million to A$647 million, compared with Coles' full-year target of A$425 million to A$435 million. Releasing the sales figures on Monday, Corbett said he now expected earnings per share to be in the range of 57 to 58 cents after goodwill amortization. The company's previous guidance was 56 to 58 cents. Woolworths share are down 1.3 percent to A$12.18 near the close Monday, but are up 6.8 percent for the year. Shares in Coles Myer are unchanged at A$7.42, representing a gain of almost 18 percent so far this year. The broader market, measured by the S&P/ASX200, is about 0.3 percent higher Monday.
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