Woolworths’ New Zealand operations delivered stronger earnings this year, though profits remained under strain.
The supermarket group told the Australian Securities Exchange that sales climbed 3.4% to $8.2 billion in the year to June 29. Gross margin improved to 22.7% and EBIT surged more than 40% to $150 million. Net profit after tax, however, remained negative at $32.4m.
Financial Recovery Undermined by Net Loss
Sales in Woolworths’ New Zealand Food segment — which includes Woolworths supermarkets, SuperValue, FreshChoice and eCommerce — rose 3.4% to $8.2 billion. Gross margins improved 11 basis points to 22.7%, while earnings before interest and tax (EBIT) jumped 40.6% to $150 million, recovering from last year’s steep decline. Return on funds employed lifted 174 basis points to 4.6%.
Sally Copland, managing director for Woolworths New Zealand said, “Despite an improvement in our earnings before interest and tax (EBIT) performance, the New Zealand business still made a loss at net profit after tax level of $32.4m.”
Transformation Strategy Driving Results
Woolworths’ leadership credited its ongoing transformation programme for the gains. Group chief executive Amanda Bardwell said: “In New Zealand Food, our transformation delivered encouraging results.”
The company has invested heavily in rebranding, digital tools, and efficiency. Bardwell signalled the push is far from over: “Our transformation will continue and we expect further improvement in our financial performance in 2026.”
Woolworths told investors it aims for a double-digit return on funds employed in the medium term, with a clear focus on delivering “value” and convenience for Kiwi customers.
Market Competition and Regulatory Scrutiny
The rebound comes as Woolworths faces tougher competition and growing scrutiny. The Commerce Commission’s 2024 report estimated Woolworths’ national grocery share dropped from 30% in 2019 to 27% in 2024, while Pak’nSave climbed from 23% to 25%.
The regulator has also put Woolworths under the microscope over pricing. The company acknowledged it faces “heightened attention from regulators” on both sides of the Tasman, including possible prosecution in New Zealand for alleged inaccurate pricing.
Consumer Behaviour and eCommerce Growth
Changing shopper habits have boosted Woolworths’ online business. ECommerce sales surged 17.7%, supported by investment in home delivery and expanded “straight-to-boot” pick-up services.
Customer engagement also grew. Everyday Rewards membership has reached 2.1 million New Zealanders, while promotions such as the Disney World of Wonder and Minecraft Cubeez campaigns lifted sales. Copland said: “Our focus this year has been on continuing to respond to the cost of living pressures facing Kiwi customers, and while we saw strong customer and financial results, we still have a long way to go to deliver on our potential.”
Countdown Rebrand to Woolworths Nears Completion
Woolworths confirmed it is continuing its nationwide rebranding programme, with all Countdown outlets to be converted by the end of 2024. The supermarket group runs 184 stores across the country and serves about three million customers each week.
Woolworths’ stronger EBIT signals progress, but the persistence of net losses shows the turnaround is incomplete. Bardwell said she expects “improved profits” in 2026, while admitting margins and returns remain below aspirations. The company’s ability to withstand regulatory pressure and regain market share will be key to restoring profitability.