Fewer office workers hits Woolies sales

Woolworths will write-down the value of 13 of its CBD stores by about $50 million as they struggle for sales with fewer office workers nearby.

The supermarket giant mentioned the charge while flagging its full-year earnings were likely to include a $57 million pre-tax net gain from significant items.

The retailer has reviewed its Metro Food Stores in view of many office workers, who usually contribute greatly to sales, working from home due to the coronavirus.

Woolworths said sales in these locations continued to be impacted.

The group had 72 Metro stores and 996 supermarkets across Australia as of April 4.

Chief executive Brad Banducci said the company remained committed to Metro stores, having refined their range in recent years.

“However, the changing customer work and shopping patterns we have seen over the last 15 months have negatively impacted some of our stores, particularly in CBD and transit locations,” he said.

He said most Metro stores were in locations not impacted by fewer office workers.

The company reported surging sales earlier this financial year as many shoppers stocked up on goods in fear of coronavirus lockdowns.

The expected $57 million pre-tax net gain from significant items is largely due to the rising value of Woolworths’ stake in data analytics firm Quantium.

A gain on equity interest of $220 million is expected.

This will more than offset the Metro Food stores writedown ($50 million), transaction costs for demerging Endeavour Group and buying PFD Food Services ($69 million), and worker redundancies at a Sydney distribution centre ($44 million).

The full-year earnings are due on August 26.

Shares were down 1.98 per cent to $42.49 at 1304 AEST amid a wider market downturn.

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