Woolworths outpaces Coles thanks to Ooshies promotion sales boost

Woolworths says the new financial year is off to a flying start, boosted by the runaway success of its Ooshies collectibles campaign, as its boss warns value-seeking shopping behaviour is now “entrenched”.

“For three years now, we’ve been talking about the pressure on household budgets. We’ve moved beyond a temporary phase into a new reality of entrenched value-seeking,” chief executive Amanda Bardwell told media as she unveiled Woolworths’ full-year results on Wednesday.

“Customers have developed money-saving habits to stretch their weekly shopping as far as possible. Lower shelf price and everyday low price are helping meet their needs.”

Citing internal research, Ms Bardwell added more than 40 per cent of customers said they were struggling to make ends meet.

She later told The Australian that households have now adopted “mature and very savvy” ways to stretch their budgets after several years of significant financial strain.

Against the backdrop of an earnings season already beset by other retail chiefs painting a bleak picture on consumer activity, Ms Bardwell noted that confidence had actually been building since May despite higher interest rates, the fuel crisis and a housing downturn.

The nation’s biggest supermarket chain booked an 18 per cent lift in net profit to $1.14 billion in the year to June 28. Excluding significant items, which included a $710 million provision to right an historical staff underpayments bungle, Woolworths’ net profit would have hit $1.6b.

Group revenue jumped 3.6 per cent to $71.5b.

But the real star of the show was its wildly popular Ooshies collectibles campaign, which drove a near-8 per cent surge in sales in the first eight weeks of the 2027 financial year.

Ms Bardwell said sales momentum at its Australian supermarkets had been building steadily in the second-half. This momentum was “amplified” by the Ooshies promotion.

“We see our existing customers really just appreciate the opportunity to bring a little moment of joy to their kids and family as they’re already shopping with us, so they get a little extra reward,” she said.

“We see some customers who certainly might decide to add a few more items to their basket while they’re shopping with us, so that they certainly qualify for the extra Ooshie.

“And then we do have some customers who might not shop with us very frequently who choose to switch to Woolies during that period.”

Rival Coles on Tuesday conceded Woolworths’ Ooshies promotion kept a lid on sales growth as it entered the new financial year.

Coles said supermarket sales growth in the first eight weeks of 2027 matched the 3.7 per cent rise recorded in the fourth quarter of 2026.

In comparison, Woolworths recorded a 7.6 per cent lift at its Australian food business over the same period, with the Ooshies campaign estimated to have added about 1.5 to 2 percentage points of sales growth.

But eToro analyst Josh Gilbert said investors should not mistake a brilliant promotion for a permanent market share win.

“Coles says the hit to sales was temporary and that trade recovered once the campaign ended,” he said.

“A promotion doesn’t rewrite the competitive landscape, but it can change habits, and that is what Woolworths is banking on.

“Amanda Bardwell inherited a business with plenty to fix when she took the reins, but her rebuild is showing up where it counts.”

Ms Bardwell had been simplifying the business and spent millions of dollars to lower prices after an extended period of underperformance.

“The action we have taken in (the 2026 financial year) to deliver more value for customers, greater convenience and better execution has improved customer advocacy and sales momentum in our key Australian food business, particularly in (the second-half),” she said.

Australian supermarket sales rose 4.6 per cent to $53.9b. That sales growth accelerated by 5.7 per cent in the second-half.

The result outpaced Coles, where supermarket sales increased 3.7 per cent to $41.5b

Pitcher Partners chief investment officer Cameron Curko said he favoured Coles over Woolworths despite the latter reporting stronger sales growth figures due to concerns that it may be overvalued.

“On relative value grounds we would still favour Coles but see both as attractive defensive options with more sustainable yields than other, more cyclical market segments such as the major banks,” he said.

Woolworths said its long-struggling discount department store chain Big W also returned to profitability.

“Improvements to our range and better execution throughout the year, particularly in clothing, led to a higher proportion of full sales, and with less clearance and markdowns,” Ms Bardwell said.

Just like Coles, Woolworths is offshoring hundreds of corporate jobs, mostly to Asia.

“We have announced our focus on continuing to expand our global support services . . . but that’s both about increasing our capability and access to global talent, and also being more efficient as we go forward,” Ms Bardwell said.

Woolworths announced a final dividend of 52¢ per share.

Woolworths shares were up 3.4 per cent to $40.18 at the close on Wednesday. Coles was up 1.2 per cent.