Woolworths : Shareholder Broadcast

3 November 2022

ASX Market Announcements Office

Australian Securities Exchange

20 Bridge Street

Sydney NSW 2000

First Quarter Sales Results

Attached for release to the market are the First Quarter Sales Results for

Woolworths Group for the 14 week period ended 2 October 2022.

Authorised by: Kate Eastoe, Group Company Secretary

For further information contact

Investors and analysts	Media
Paul van Meurs	Woolworths Press Office
Head of Investor Relations	[e-mail]
[phone]	[phone]

Woolworths Group Limited ABN 88 000 014 675

1 Woolworths Way, Bella Vista NSW 2153

First Quarter Sales Results

Financial Year 2023 - 14 weeks to 2 October 2022

3 November 2022

Group sales		Group eCom sales		GroupVOC NPS
$16,363M		$1,607M		50
 1.8% vs Q1 F22		 14.5% vs Q1 F22		 1 pt vs Q1 F22

Transition to a post-COVID trading environment well progressed, with

focus now on an inspirational and affordable Christmas

Woolworths Group CEO, Brad Banducci, said: "While year on year sales growth rates were impacted by the cycling of COVID in the prior year, customer shopping behaviours and the trading environment continued to normalise during the quarter. Pleasingly, customer scores have improved compared to H2 F22 but remain a key focus in the lead up to Christmas.

"In our Food businesses, sales were below the prior year as we cycled strong growth driven by COVID-related restrictions in F21 and F22. Australian Food sales decreased by 0.5% and New Zealand Food sales were down 2.5% compared to the prior year. On a three-year compound annual growth basis, sales in Australian Food were up 5.3% and up 4.7% in New Zealand Food. In Australian B2B, Q1 sales increased by 26.0% compared to the prior year primarily due to strong growth from PFD. BIG W sales were up 30.1% (3-yr CAGR: +8.9%) cycling lockdown-related temporary store closures in the prior year.

"eCommerce sales in Australian Food (-10.8%) and BIG W (-51.8%) were lower than the prior year as customer mobility increased. However, on a three-year CAGR, sales growth remained strong, increasing by 43.5% and 43.7% respectively. eCommerce penetration in Australian Food was 10.2%, 6.2 pts above Q1 F20 and 9.4% in BIG W, 5.3 pts above F20. New Zealand eCommerce sales grew at 5.9% (3-yr CAGR: +23.3%) with penetration of 14.2%, up 5.5 pts on F20.

"Inflation continued to accelerate in Q1 compared to the prior year with average prices in Australian Food increasing 7.3%, and 5.3% in New Zealand Food. We continue to see early signs of customer purchasing habits changing, but it remains unclear how much of this relates to cost-of-living pressures compared to COVID normalisation.

"In October, year on year sales growth trends in Australian Food have improved as we cycle out of the NSW and Victorian lockdowns of last year, with the three-year sales growth rate broadly in line with Q1. In New Zealand Food, we are seeing signs of stabilisation in the trading environment; however, given the combination of lower sales and materially higher wage inflation, we currently expect H1 F23 EBIT of NZ$100 - $130 million (H1 F22: NZ$200 million). At this stage, we expect H2 F23 EBIT to be above H1 F23 and H2 last year, with uncertainty on the trajectory of the improvement.

"Ensuring all our customers Get their Woolies worth remains our key priority in Q2. On Tuesday we announced our plans to deliver value this Christmas with a selection of seasonal favourites and entertaining essentials to be the Same Price or less than they were at Christmas last year. We also announced our Prices Dropped for Christmas program covering 150 products. This is in addition to our Low Price, Weekly Specials and personalised Member Boosts through Everyday Rewards.

"There are 51 days until Christmas and we are very focused on delivering a much-needed inspirational and affordable festive season for our customers. Ongoing supply chain volatility and the possibility of another wet summer will be key challenges to navigate but we are seeing strong early sell through of seasonal lines and we remain cautiously optimistic for the period ahead. As always, I would like to thank our team for their amazing dedication, our partners for their resilience and agility, and our customers for their ongoing support and the feedback they provide on areas for improvement."

First quarter sales

		Q1'23	Q1'22
$ MILLION		(14 WEEKS)	(14 WEEKS)	CHANGE	3-YR CAGR
Australian Food		12,204	12,271	(0.5)%	5.3%
Australian B2B		1,199	952	26.0%
New Zealand Food (AUD)		1,802	1,962	(8.1)%
New Zealand Food (NZD)		2,007	2,060	(2.5)%	4.7%
BIG W		1,197	920	30.1%	8.9%
Other1	(39)	(35)	14.1%
Total first quarter sales for the Group	16,363	16,070	1.8%

1 Other includes revenue from Quantium and eliminations that represent freight revenue recognised in the Australian B2B segment as revenue but classified as an offset to COGS at a Group level

1 Woolworths Group Limited ABN 88 000 014 675

Australian Food

Sales performance by channel

$ MILLION		Q1'23	Q1'221	CHANGE	3-YR CAGR
Woolworths Supermarkets (store-originated)2		10,608	10,558	0.5%	2.9%
Metro Food Stores (store-originated)2		284	256	10.8%	4.6%
WooliesX B2C eCommerce		1,239	1,389	(10.8)%	43.5%
Woolworths Retail (stores and eCommerce)		12,131	12,203	(0.6)%	5.2%
Adjacency revenue3	73	68	7.8%	33.5%
Total Australian Food	12,204	12,271	(0.5)%	5.3%

Operating metrics

		Q1'23	Q1'22
Customer metrics4
VOC NPS (Store and Online)		50	51
Store-controllable VOC (%)		78	79
Sales metrics
Comparable sales growth		(1.1)%	2.7%
Three-year average comparable sales growth		4.4%
Volume productivity metrics5
Comparable transactions growth		5.1%	(6.8)%
Comparable items per basket growth		(13.0)%	10.0%
Comparable item growth		(8.6)%	2.5%
Change in average prices
Total	7.3%	(0.9)%

1. Prior year restated to conform to current year's presentation
2. Excludes eCommerce sales fulfilled from stores
3. Adjacency revenue includes Digital, Data & Media and Loyalty & Fintech revenues
4. Customer metrics represent the final month of the quarter
5. Volume productivity metrics are disclosed as percentages and therefore may not add

Australian Food VOC NPS (Store and Online) finished Q1 at 50, an increase of one point compared to Q4 F22 with Store-controllable VOC finishing Q1 at 78%, an increase of three points compared to Q4 F22. The improvement in customer metrics in Q1 F23 reflects the ongoing recovery from COVID-related supply chain disruption, as well as the easing of Fruit & Vegetable supply challenges from September. VOC NPS and Store-controllable VOC were one point below the prior year.

Australian Food total sales in Q1 declined 0.5% to $12.2 billion but on a three-year CAGR, sales increased by 5.3%. Woolworths Retail (stores and eCommerce) sales declined 0.6% (+0.4% ex Tobacco) and comparable sales declined 1.1% (-0.1% ex Tobacco) with three-year average comparable sales growth of 4.4%.

Woolworths Retail sales growth was impacted by a decline in items given the cycling of higher in-home consumption in the prior year driven by extended COVID lockdowns in NSW and Victoria as well as supply challenges in Fruit & Vegetables this year. This was partially offset by shelf price inflation due to input cost pressures.

Woolworths Supermarkets (store-originated) sales for Q1 were $10.6 billion, an increase of 0.5% (+1.7% ex Tobacco). WooliesX B2C eCommerce sales decreased 10.8% to $1.2 billion as customers returned to shopping in store following elevated eCommerce sales during the prior year lockdowns, with sales penetration of 10.2% (Q1 F22: 11.4%). Metro Food Stores (store-originated) sales increased 10.8% to $284 million supported by new store growth, a gradual recovery in On the Go stores and shelf price inflation.

Woolworths Food Company's own and exclusive sales declined 2.0%, impacted by Fresh due to Fruit & Vegetables supply challenges and cycling elevated protein sales in the prior year. Long Life sales were in line with the prior year, outperforming total sales growth with categories such as Frozen Foods and Drinks benefitting from their strong value proposition. On a three-year CAGR, sales increased by 5.6% with the longer-term growth driven by strong product development across value-added ranges like BBQ and Macro.

2 Woolworths Group Limited ABN 88 000 014 675

Australian Food

Average prices increased 7.3% compared to Q1 F22. In Fresh, inflation increased further compared to Q4 F22 with double-digit inflation in fruit and vegetables driven by inclement weather, as well as inflation in red meat, driven by higher commodity prices, and dairy products driven by higher milk farm gate prices. In Long Life, inflation was mainly driven by higher supplier cost price increases due to industry-wide input cost pressures.

Woolworths continued to focus on delivering value for customers through the Get your Woolies worth platform as cost- of-living pressures continued to rise. This included Prices Dropped on over 300 winter staples and a Low Price Freeze on almost 200 own brand essentials until the end of the calendar year. These programs are resonating strongly with customers with incremental volume growth across these lines.

During the quarter, one net new Metro and two CFCs were opened with 10 Renewals completed. At quarter end, the total fleet includes 995 Woolworths Supermarkets, 91 Metro Food Stores, seven CFCs and two eStores.

Woolworths also opened eight Mini Woolies across NSW and ACT in Q1, bringing the total to 23 stores nationwide. The program provides students in both special education schools and adult learning centres valuable life skills and work experiences in a safe environment with some students also being offered job placements in nearby Woolworths Supermarkets.

Together with customers, and in partnership with Foodbank and Fareshare, Woolworths raised over $2.5 million as part of the mid-year Hunger Relief Appeal to support the growing need for food relief across Australia. More recently, Woolworths team members rallied to support communities impacted by flooding across NSW and Victoria in partnership with The Salvation Army to provide relief in Shepparton, Bendigo, Swan Hill and Echuca.

3 Woolworths Group Limited ABN 88 000 014 675

WooliesX

Digital & Media metrics

	Q1'23	Q1'22
Food and Everyday digital platforms1
Average weekly traffic (million)	13.9	13.4
Average weekly traffic growth (year on year)	3.6%	28.0%
Group2
Average weekly traffic (million)	20.2	20.3
Average weekly traffic growth (year on year)	(0.5)%	30.4%

B2C eCommerce metrics

	Q1'23	Q1'22
Customer metrics3
Online VOC NPS	60	56
eCommerce sales metrics4
eCommerce sales ($ million)	1,239	1,389
eCommerce sales growth	(10.8)%	53.1%
eCommerce penetration	10.2%	11.4%
Pick up mix (% of eCommerce sales)	38.0%	38.5%

Loyalty metrics

EVERDAY REWARDS	Q1'23	Q1'22
Total members (million)	13.9	13.3
Member scan rate5 (%)	53.9	54.7

1. Q1 F22 has been restated to include Woolworths Mobile and HealthyLife digital platforms
2. Q1 F22 has been restated to include Woolworths Mobile, HealthyLife, gift cards, B2B and PetCulture digital platforms
3. Customer metrics represent the final month of the quarter
4. WooliesX B2C eCommerce sales are included in Australian Food
5. Scan rates excluding Tobacco

Digital & Media saw continued growth in engagement with weekly average traffic to the Food and Everyday digital platforms reaching 13.9 million weekly visits, up 3.6% on Q1 F22, driven by increased traffic to the Woolworths app and Everyday Rewards app. Weekly average traffic to Group digital platforms reached 20.2 million, down 0.5% on the prior year due to cycling COVID-related traffic increases.

The transition to a Real Time Loyalty (RTL) platform was completed in September, providing members with the ability to unlock more 1:1 promotions and relevant content in real-time. RTL also enables faster analysis of campaigns which supports more relevant and targeted member engagement.

B2C eCommerce sales declined 10.8% to $1,239 million in Q1 due to cycling COVID lockdowns in the prior year. A return to more normal trading conditions and increased customer mobility resulted in penetration moderating to 10.2%, down

1.2 pts on Q1 F22 but up on Q4 F22 penetration of 9.8%. VOC NPS improved to 60 in the quarter, up four points on the prior year and two points on Q4 F22, reflecting improvements in providing customers with a complete order, packing with care and on time delivery. Q1 also saw continued growth in Delivery Unlimited driving incremental sales and advocacy.

Two new CFCs opened in the quarter (Rochedale, Qld and Caringbah, NSW) and 19 new Direct to boot sites were added to the network bringing the total Direct to boot sites to 688 at the end of the quarter.

Everyday Rewards total members increased to 13.9 million, up from 13.3 million in Q1 F22 and 13.7 million in Q4 F22. Enhancements to the Everyday Rewards app and an increase in Member Boost offers delivered members more personalised value resulting in record levels of weekly app users.

4 Woolworths Group Limited ABN 88 000 014 675