Key Highlights

  • Australian Food sales rose 6.9% in the first quarter of FY27, while average prices fell 0.7%, excluding tobacco.
  • Group sales for FY26 rose 3.6% to A$71.54 billion.
  • EBIT before significant items rose 12.7% to A$3.11 billion, and NPAT before significant items rose 15.4% to A$1.60 billion.
  • The final Dividend was 52 cents per share, fully franked, up 15.6%, and BIG W returned to profit.

How is the country's largest supermarket group growing sales while its average shelf prices are falling? That is the puzzle in Woolworths Group's (ASX:WOW) first-quarter FY27 update, released on 28 October 2026. Australian Food sales rose 6.9% even though average prices, excluding tobacco, fell 0.7%, the eleventh straight quarterly decline. The explanation lies in more items per basket, more transactions, an encouraging online Business and a turnaround at BIG W. The same update also shows where growth is not coming from, notably New Zealand. The period-specific figures provide context for the company’s operating performance and execution priorities.

The FY26 result in brief

Woolworths reported its FY26 result on 26 August 2026. The final dividend was 52 cents per share, fully franked, up 15.6%. BIG W returned to profit after a loss in the prior year, which the company update attributed to better stock management and more encouraging own-brand ranges.

Note the phrase "before significant items". Such items are one-off costs or gains that the company excludes from its preferred measure, and statutory profit may differ.

The first quarter of FY27

The quarter covered 14 weeks to 4 October 2026. Group sales were A$19,353 million, up 4.7% (5.7% in constant currency, which strips out exchange-rate effects). Group eCommerce sales were A$3.1 billion, up 16.0%.

In Australian Food, sales were A$14,841 million, up 6.9%. Woolworths Food Retail sales were A$14,680 million, with comparable sales up 6.1%, made up of comparable item growth of 4.0% and comparable transactions growth of 3.0%. Fresh categories grew 8.1% and long-life categories 5.9%. Own and exclusive brands grew 8.5%. Online sales in the supermarket business were A$2,665 million, up 20.2%, taking eCommerce penetration to 18.2% from 16.2%. Everyday Rewards had 10.9 million active members, up 3.7%.

The company attributed an early-quarter boost to its Ooshies collectible campaign, and it said October trading in Woolworths Food Retail was broadly in line with the quarter after that campaign. That is a useful caution: promotional campaigns can pull forward spending, so part of the quarter's growth may not repeat.

Other segments

New Zealand Food sales were NZ$2,251 million, up 2.9% in local currency, but A$1,853 million, down 6.4% after currency translation. Australian B2B, which includes wholesale food distributor PFD, rose 4.4% to A$1,634 million. BIG W sales were A$1,127 million, down 0.9%, with comparable sales down 1.3%, although BIG W's online sales were up 7.7%.

A small change in supermarket performance therefore swamps changes elsewhere.

Competitive position

Woolworths competes with Coles, Aldi and Costco, plus independent grocers supplied by Metcash. supermarket market is concentrated, and the large chains have faced political and regulatory scrutiny over pricing and margins. Woolworths' response has been to invest in prices and range, with more than 1,000 products on its Lower Shelf Price range, and to build digital convenience: 48% of delivery orders were fulfilled within two hours, up five percentage points, according to the update.

The company's loyalty program, supply-chain Investment and its own brands are structural advantages. The Moorebank Supply chain precinct is expected to bring efficiency gains as it ramps up this year, according to management's FY26 commentary. These are plans rather than delivered savings.

Outlook

In August management said the economic environment remained challenging with household budgets under pressure, that Australian Food had shown encouraging momentum in the first eight weeks of FY27, and that trading in New Zealand and at BIG W was expected to remain subdued. The Q1 update is broadly consistent with that.

Investors comparing Woolworths with Coles should look at EBIT margins, since falling shelf prices with rising volumes may put pressure on gross margin, and at how much of the EBIT growth in FY26 came from the BIG W recovery, which is a one-time rebound from a low base rather than a repeatable growth rate.

Risks

Price investment and regulatory scrutiny, which could limit margin.

Cost-of-living pressure that changes customer behaviour in either direction.

Competition from Coles, Aldi and Costco, and from online platforms.

Weak New Zealand and discretionary retail trading.

Execution risk on supply chain projects such as Moorebank.

Upcoming events

Woolworths has scheduled an Investor Day for Wednesday 18 November 2026 at 9:00 am AEDT, with a webcast. That event is likely to give more detail on strategy and targets. The half-year result is expected in February 2027, though the date should be confirmed on the company's calendar.

In short, the Q1 numbers show the core Australian supermarket business gaining traffic and online share while average prices fall. The evidence for Earnings growth beyond FY26's recovery will come from margins, which are reported at the half-year, not from sales alone.