Key Highlights

• The update covered the 14 weeks to 4 October 2026.

• Group sales rose 4.7 per cent on the same period a year earlier (5.7 per cent in constant currency), to $19,353 million.

• Group eCommerce sales reached $3.1 billion, up 16.0 per cent.

• Sales rose 6.9 per cent to $14,841 million, and comparable sales at Woolworths Food Retail increased 6.1 per cent.

What did Woolworths (ASX:WOW) Group's latest quarterly update tell investors about its grocery business, and why does it matter? On 28 October 2026 the supermarket operator reported group sales of $19.4 billion for the first quarter of its 2027 financial year, with Australian Food growing faster than in the prior year. The headline is encouraging, but a promotional campaign flattered the figures, and the next few months will show how much of the momentum is underlying.

The central development: a encouraging start, with a caveat

The update covered the 14 weeks to 4 October 2026. Group sales rose 4.7 per cent on the same period a year earlier (5.7 per cent in constant currency), to $19,353 million. Group eCommerce sales reached $3.1 billion, up 16.0 per cent.

Australian Food did the heavy lifting. Sales rose 6.9 per cent to $14,841 million, and comparable sales at Woolworths Food Retail increased 6.1 per cent. Chief executive Amanda Bardwell said she was pleased with the start to the year in that division.

The caveat is the Disney Ooshies collectibles campaign, which boosted early-quarter trading. At the full-year result in August, management estimated the program added between 1.5 and 2 percentage points to Australian Food sales growth in the first eight weeks of the year. Management said October-to-date growth in Woolworths Food Retail is broadly in line with post-Ooshies trading in the quarter, which is a more useful guide than the headline.

What Woolworths does and where its Revenue comes from

Woolworths Group is one of Australia's two dominant supermarket operators. Its largest segment, Australian Food, covers the Woolworths supermarket network and its online business. Alongside it sit New Zealand Food, Australian B2B (which includes PFD and Supply to quick-service restaurants), and W Living, which houses BIG W and the pet retailer Petstock.

Food Retailing generates most of the sales, and online is an increasingly important channel. In the first quarter, eCommerce penetration in Australian Food reached 18.2 per cent, and the eComX Business grew 20.2 per cent.

Latest annual results

Woolworths reported its 2026 full-year results on 26 August 2026. For the year to June 2026, group sales rose 3.6 per cent to $71.54 billion. Earnings before interest and tax, before significant items, rose 12.7 per cent to $3.105 billion, and net profit after tax before significant items rose 15.4 per cent to $1.599 billion.

on the result noted that growth in EBIT was 8.7 per cent when roughly $95 million of cycled industrial action and supply chain costs were excluded, which is a fairer measure of the underlying gain. The final Dividend was 52 cents per share, fully franked, taking the full-year dividend to 97 cents, up 15.5 per cent.

Australian Food EBIT rose 8.5 per cent on sales growth of 4.6 per cent. W Living swung to an EBIT of $116 million from a $31 million loss, with BIG W returning to a $64 million profit and Petstock EBIT rising 33.5 per cent.

Weaker spots: New Zealand and BIG W

Not every division is encouraging. In New Zealand, first-quarter sales rose 2.9 per cent in local currency but fell 6.4 per cent once converted into Australian dollars, reflecting a weaker New Zealand dollar. Growth slowed after the Ooshies campaign ended, in a competitive market with softer consumer sentiment. The customer satisfaction score for the division fell to 40.

BIG W sales declined 0.9 per cent to $1,127 million in the quarter. Management has said it expects another challenging year for the discount department store, where budget-conscious shoppers feel cost-of-living pressure most.

Sector conditions and competition

Australian supermarkets operate in a concentrated market in which Woolworths and Coles hold the largest shares, with Aldi and independents competing on price. Woolworths describes household budgets as still under pressure and says it is concentrating on low prices, range and convenience.

One data point stands out. Average prices in Woolworths Food Retail fell 0.5 per cent in the quarter, the eleventh consecutive quarter of price declines on the company's measure. Growth is therefore coming from volumes and mix rather than inflation, which can be positive for Market Share but puts pressure on margins unless costs are managed.

Costs, Investment and Moorebank

Cost Inflation is a central theme. Management expects wage growth to stay elevated, including a 4.75 per cent annual increase in Australia, and has guided operating Capital Expenditure of $1.9 billion to $2.0 billion for 2027, up from $1,837 million in 2026.

Supply chain investment is part of that. Costs associated with supply chain implementation and the Moorebank precinct in Sydney were $113 million in 2026. Management expects efficiency gains from Moorebank as it ramps up in 2027, partly or materially offsetting those costs, but timing and execution remain uncertain.

Risks and uncertainties

Several risks stand out. First, the Ooshies uplift will drop out of comparisons, so the underlying run-rate of Australian Food growth is the key question. Second, shoppers remain value-focused, and promotional intensity could affect margins. Third, New Zealand has been soft after price cuts, higher stock loss and disruption from a new store operating model, and the Exchange Rate affects reported results.

What to watch next

Woolworths has scheduled an Investor Day for 18 November 2026, starting at 9:00 am AEDT. The company has also said it is positioned for the Christmas and holiday period, including more than 500 budget-conscious festive products.

In short, the first quarter shows an Australian Food business with real momentum and a growing online arm, alongside softer trading in New Zealand and at BIG W.