Industry News,

Australian Retail Interim Update Results Woolworths, February 2024

The February 2024 trading update by Woolworths provides valuable insights into the growth opportunity for UK-based food and beverage businesses targeting export success into the Australian grocery retail sector. 

With the reporting season underway for Australia’s two leading grocery retailers, Woolworths and Coles, we can examine their trading insights in 2024 so far. Woolworths update is released to the market first.  

Our in-country team have pulled out the highlights and found the opportunities for UK-based businesses looking at growth into the Australian market. These reports provide valuable insights into the latest customer shopping habits, the impact of the current economic pressure and how it continues to influence the way consumers shop and eat, and brands or categories that are winning.   

Combined, these two retailers represent around two-thirds of the Australian grocery retail market, so their insights are significant indicators on the sensitivity or outlook of the sector. 

Top line Performance: Woolworths

Woolworths Storefront

It’s important to recognise the rapidly evolving political landscape and the focus on the Australian retail sector as the Government and the ACCC focus on alleged priced gouging by the major retailers and its impact on the cost-of-living challenges currently being experienced by Australian consumers.  

There are several articles, interviews and media coverage from both sides being aired weekly as each side prepares for a 12-month review process. In the third week of February 2024, the CEO of Woolworths announced his retirement forthcoming in the upcoming August, as Woolworths report their year-end results. 

Woolworths’ Key Trading Highlights

As a total business at a top level, Woolworths reported a net loss of ~$781m compared to last year’s $845m profit. This is largely due to exceptional one-off costs for the NZ business and the exit from the drinks business. 

Outside the write-offs, Woolworths’ net profit grew by 2.5% to $929m. Revenue increased by 4.4% to $34.63B, slightly ahead of market expectations at $34.58B. 

The first 7 weeks of the second half of trade are described as moderated with lower inflationary pressures and consumer behaviour is described as cautious. Food sales for the period are up 1.5%   

Woolworths brand Muesli on shelf.

Sustainability continues to be a key focus within Private Label. Some significant milestones were delivered this half through reducing plastic or aiding the ability to recycle materials.  

In our view, whilst we are starting to see price deflation outside of fresh produce, good weather has helped the supply of fresh produce, meat prices are dropping, and in store discounts have increased to try and create a clear value message.  

Pricing mechanics are changing to include price off, member pricing, additional loyalty points and multi-buys, adding complexity in-store which will reduce the benefits that have previously been the focus through EDLP.   

Woolworths Brand Quick Oats. 

The strategy on Private Labels feels to be changing with less Private Label products—or reduced penetration—apparent on the shelves, although not quantified. The push for value has seen Woolworths rebrand their value offer  

Australian households and businesses have seen 13 interest rate rises between May 2022 and February 2024. With the warmer weather, the pressure on heating costs and energy will be less obvious; the underlying pressures remain.  

What Is the Opportunity for UK Food and Drink Businesses Targeting Growth in Australia?

The Australian grocery retail market has endless growth opportunities. With two main go-to-market strategies—Private Label and Branded—you can successfully push your food and drink business to target growth within Australia.   

Private Label

The Private Label market is experiencing significant growth, presenting food manufacturers with opportunities to expand their business.  Competing on high-volume lines where you can offer efficiencies through procurement, automation or volume remains a key opportunity as retailers continue to source internationally to access better commercial performance and invest in price.    

Additionally, understanding the growth channels, trends and innovation requirements of the market enable UK manufacturers to offer access to turnkey innovation under the retailer’s Private Label offer. Products developed and proven in other international markets can easily be adapted to the Australian palate or consumer.  

Branded Label

The Branded Label opportunity is also experiencing growth as new brands rapidly enter the market to fill the innovation gap as consumer needs change. Having the flexibility of a start-up and ability to innovate with agility gives new brands an advantage versus the major local brands driven on cost control and operational efficiency.  

Recognising the innovation within the UK food and drink sector, this translates to an exciting opportunity for established UK businesses that operate a portfolio of brands and are innovating to gain market share in other highly competitive markets.  

The high level of appreciation or trust between consumers in both countries increases the opportunity to win. Understanding the competitive landscape is critical to unlock these opportunities through the identification of product or range gaps and marketing messages that resonate with consumers. 

Benefit from Australian Market Consumers 

Outside of the reporting, we know Australian consumers are continuing to shop for value. This is resulting in higher growth in premium products such as meat, coffee, health & beauty, confectionary, wine and condiments as more consumers have that special occasion at home, reducing the value of out-of-home eating.  

This creates an opportunity for UK food and drink businesses that bring something different and have a clear USP away from the value play. Additionally, health and wellness or sustainability continues to be high growth areas, so products that have enhanced nutritional benefits or functionality—such as high protein, added collagen, or repurposed vegetables—are resonating well with consumers and retail buyers alike. 

In an increasingly competitive market, being ready or prepared is essential before approaching one of the major retailers. Understanding the competitive landscape, regulatory compliance, supply chain requirements, marketing strategy and how to support the new business effectively are some of the key strategic aspects to consider.  

Prof. Consulting Group 

Prof. Consulting Group will help lead your business to success in the Australian food industry with its team of industry-leading experts and extensive range of services. For more information or to discuss how Prof. Consulting Group can support your business, please visit