Supermarket giant Woolworths recorded a sales increase during the third quarter, although the company said it remains cautious about the next three months.
The company announced that in the 13 weeks to April 1, it recorded a 3.8% rise in total group sales to $14.07 billion, despite the unseasonably cool weather.
Sales across the company in supermarkets, bottle shops, Big W and hotels all increased.
“This has been achieved in a continuing tight consumer market,” chief executive Grant O’Brien said in a statement.
“While the quarter saw an improving sales trend, we continue to remain cautious about the sales outlook for the fourth quarter, particularly given consumer and business uncertainty about the impact of the carbon tax and interest rates,” he said.
However, deflation is a problem. Average prices fell by 4.4% from the previous corresponding period, due to “the continued lowering of prices to deliver value for customers”.
“Sales continue to be impacted by significant deflation, particularly in produce, seafood, bakery and deli,” managing director of supermarkets and petrol, Tjeerd Jegen, said in a statement, noting that in fresh produce prices have fallen about 20%.
Business sales increased during April, according to the latest Commonwealth Bank Business Sales Indicator.
The index, which records the value of credit and debit card transactions sent through Commonwealth Bank terminals, rose by 0.8% in trend terms, following a 0.9% rise in February and 1% increases in both January and December.
Executive general manager of local business banking Matt Comyn also said in a statement that consumers’ spending habits are changing, as the amusement and entertainment category shows positive gains, while retail stores expanded by 1% in March – the eighth consecutive increase above 1%.
CommSec economist Craig James said the results were positive.
“The start of the recovery in August last year followed seven-straight months of contraction, so consumer spending has been gathering momentum for some time.”
“As we’ve noted in previous releases, this is despite the fact that overall levels of consumer confidence remain low, so although people have a more negative view on the economy, that doesn’t necessarily mean we aren’t willing to spend.”
The Australian sharemarket has opened flat this morning after weak leads in the United States, where fears are rising over the Eurozone crisis.
The benchmark S&P/ASX200 index was down 4.3 points or 0.1% to 4358.4 at 12.00 AEST, while the Australian dollar fell to $US1.03c.
In the United States, the Dow Jones Industrial Average fell 68 points or 0.5% to 12,964.1.
Tech giant Microsoft recorded profit of $US5.1 billion in the third quarter, down from the $US5.2 billion it recorded in the same corresponding period last year.
Revenue rose by 6% to $US17.4 billion.
“We’re driving toward exciting launches across the entire company, while delivering strong financial results,” said chief executive Steve Ballmer.
The company’s Windows division saw revenue up 4% from last year to $US4.6 billion – the company hopes to boost that later this year with the release of Windows 8, its latest operating system.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
