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Customers feeling war impact, supermarket giant warns

Woolworths enjoyed a surge in sales in its recent quarter, yet warns the future is uncertain.

Woolworths enjoyed a surge in sales in its recent quarter, yet warns the future is uncertain. Photo: AAP

Australian shoppers are feeling the impact of higher petrol prices on top of ongoing cost-of-living pressures, the country’s biggest supermarket chain says.

Woolworths, which claims close to a third share of the market through almost 1000 outlets, on Thursday reported a 4.5 per cent lift in total sales for its third quarter to $18.1 billion.

Most of the revenue was driven by food sales, which rose almost 6 per cent to $13.8 billion.

But the outlook for fourth-quarter earnings was less clear, particularly if the Middle East conflict dragged on, chief executive Amanda Bardwell said.

“We are seeing early signs that the conflict in the Middle East is impacting our customers and team, many of whom were already experiencing significant cost-of-living pressures,” Bardwell said.

“Our primary focus since March has been to take the necessary steps across the group to minimise the impact on customers.”

Since the US attacked Iran on February 28, oil prices have soared after the Strait of Hormuz, a key shipping lane for about 20 per cent of the world’s crude, was blocked.

The upward pressure on the price of Brent crude, which on Thursday hit $US120 a barrel, has pushed up the cost of petrol and diesel used by consumers and businesses.

“The group has mobilised rapidly to respond to this environment and we are engaging regularly with government as their response plans are developed,” Bardwell said, referring to the push to secure fuel supplies for Australia.

“It is still too early to predict with any certainty the direct and indirect impacts on fiscal 2027 from the conflict in the Middle East and how this will impact customer shopping behaviours.”

Also on Thursday, Woolworths announced a three-month price freeze on a host of grocery staples, ranging from its own-brand eggs and bread to pasta, sausages and nappies.

“While we don’t know how long these challenges will last, or what the full impact of higher costs will be on our customers’ favourite products, we know a little certainty can go a long way,” Bardwell

“That’s why, for the next three months, we’re freezing the shelf price on 300 staples that families rely on most, like eggs, chicken breast fillets, pasta, beef sausages and nappies.

“It’s our promise that the shelf price you see on these items today is the most you’ll pay for the next three months. We’ll invest to absorb any extra costs that are agreed with suppliers on these products to make that happen.”

The products may also be further discounted with specials.

-with AAP

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