SYDNEY, Oct. 28 (Xinhua) -- Australia's retail chain Woolworths Ltd first quarter sales for the 14-week period of FY17 have returned to growth for the first time in almost two years with food sales lifting by 1.7 percent to 9.32 billion Australian dollars (7.08 billion U.S. dollars).
In a statement to the Australian Securities Exchange Ltd on Friday, the company said food prices, on average, went down 1.9 percent in the quarter, led by price cuts to groceries and bakery goods.
Excluding tobacco, average prices were down 2.8 percent.
The company had also slashed the prices of more than 600 items and had a total of 2,230 items on the reduced price list during the quarter which contributed to the rise in sales revenue.
"We made good progress during the quarter on our five key priorities and are seeing far more consistency in our trading performance in Australian Food," Woolworths Group Chief Executive Officer, Brad Banducci said.
"Customers continue to respond to the improvements we are making, with Australian Food delivering its first positive comparable sales growth since Q2'15, despite ongoing material price deflation."
"While we are pleased with our progress, there remains much more to do."
"Our trading performance over the key Christmas trading period is crucial to the financial performance of the Woolworths Group in FY17," Banducci said.
Sydney-headquartered Woolworths, which also owns BWS and Dan Murphy's, reported a 3.8 percent rise in liquor sales to 1.97 billion Australian dollars (1.5 billion U.S. dollars), with comparable sales up 1.8 percent.
However, its petrol stations slumped by 11 percent in sales to 1.18 billion Australian dollars (90 million U.S. dollars), mainly due to tumbling oil prices.
The groups' discounted retail department BIG W continues to perform badly with sales falling by 5.5 percent to 880 million Australian dollars (668 million U.S. dollars) for the quarter.
"Looking forward, we expect modest improvement in apparel sales in the second half as we transition to directly sourced and designed product," the company said in regards to Big W.
Meanwhile, CMC Markets chief market strategist Michael McCarthy told Xinhua that on a overall basis Woolworths performed "poorly."
"While it was an improvement on previous results, overall growth here is simply not coming through and it is cleared from these numbers that Woolworths are being beaten by its major competitor," McCarthy said.
"Although there was an initially burst of enthusiasm for Woolworths shares (at the open) they have since given up all of their gains and I do expect them to finish in negative territory today (Friday)," he added.
At 14:22 local time (AEDT), shares in Woolworths were down 0.32 cents, or 1.29 percent, to 24.48 Australian dollars (18.60 U.S. dollars).
