SYDNEY, Australia (FNS) -- Woolworths, Australia's largest supermarket chain, said it boosted its share of the overall market and improved earnings in the year ended in June. Roger Corbett, group managing director and chief executive officer, said that by the year-end, Woolworths' market share of food, liquor and grocery had grown from 1 percent to 25.6 percent. The company added 26 new supermarkets to the chain, with the closure of seven smaller stores during the year, bringing the total number to 627. Total trading area grew 5 percent and comparable sales growth was 6.3 percent. The company boosted pretax earnings for the year by 16 percent on a sales gain of 11 percent.
better working capital control. Bernie Brookes, chief general manager supermarkets, buying and marketing, said the central shared-service buying, which initially became operational in July last year, is now performing very well after some early problems. The chain's Plus Petrol outlets continued to expand and to broaden their discounted fuel offerings to more customers across Australia.
Woolworths began taking over some outlets from the ailing Franklins supermarket chain following an agreement to acquire 67 of the stores. The company has reopened 20 of the 67 stores. These are expected to be earnings neutral in the 2001/2 year, and to be earnings positive in the 2002/3 year. Onikul noted that initial market research following the reopening of ex-Franklins stores "has shown that the customers are delighted with their new Woolworths stores. Research showed 57 percent of customers [responded] positively to the change to Woolworths." The company plans to continue to add 15-25 supermarkets each year for the foreseeable future.
James Strong, chairman, said the company's latest results underline the substantial progress the retailer has made in the last 12 months. "The sales environment has continued to be favorable, with the last quarter better than expected," he said. "We have particularly focused on three aspects of our business - growing sales, reducing costs of doing business, and streamlining the balance sheet," Corbett said. "As evidence of this, our market share has grown, costs have risen at a little over half the rate sales have grown, and average return on funds employed has increased sharply."