While the food and liquor core of Woolworths’ business continued to record strong revenue and profit growth, it was once again the discretionary parts of the business that have struggled. Masters recorded a $103 million loss for the half, while General Merchandise (Big W) profit fell 9% and Hotels declined 11.8%.
Sales revenue in the Home Improvement division did grow strongly, rising 24.1% to $988m. EBIT for Home Timber & Hardware rose 20% to $9m, while Masters increased its loss to $112 million.
While Masters continues to bleed, Bunnings feasts off the carcass. Wesfarmers result revealed that Bunnings sales revenue increased 11.8% to $4.9m while profit climbed 10% to $618m. The first mover advantage, better site locations and warehouse feel of the Bunnings format continues to be preferred by customers.
David Lane is a director of Wealth Management at Pitcher Partners