Thank you for standing by, and welcome to the Woolworths Group FY 2020 Q1 analyst sales announcement. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Brad Banducci, Managing Director and Chief Executive Officer. Please go ahead.
Good morning, everyone. Thanks for joining us this morning for the Woolworths Group first quarter sales results for F20 . Joining me in the room this morning is Stephen Harrison, our CFO, Claire Peters, Managing Director of Woolworths Supermarkets, Amanda Bardwell, Managing Director of WooliesX, David Walker, Managing Director of Big W, Steve Donohue, Managing Director of Endeavour Drinks, and David Moore, our Chief Operating Officer. Also joining us on the phone is Natalie Davis, Managing Director of Woolworths New Zealand. Before I turn to sales, I wanted to address the other announcement we made to the ASX this morning. As you'll be aware, we recently implemented new enterprise agreements for Woolworths Supermarkets and Metro stores, Big W, BWS, and Dan Murphy's.
After we implemented the Woolworths Supermarkets and Metro Enterprise Agreement, we received feedback from a handful of our salaried team members about their pay relative to our Enterprise Agreement waged team members. This sparked the beginning of a review to compare payments and conditions, and terms and conditions for our Woolworths Supermarkets and Metro salaried store team members against the General Retail Industry Award. Annual salaries for store team members are set to cover all their working hours and reasonable overtime. However, team members are entitled to be paid the higher of the contractual salary entitlements or what they would otherwise have earned for actual hours worked under the agreement. The review has found the number of hours worked and when they were worked, more importantly, were not adequately factored into the individual salary settings for some of our salaried store team members.
The review over the past years have found that approximately 5,700 salaried team members at store level have not been paid in full compliance with Woolworths Group's obligation under the agreement. Our processes confirm that current and former salaried team members have been paid in accordance with their contractual entitlements, and there is no evidence that these shortfall in payments have in any way been deliberate. This issue does not affect team members that are covered by one of our enterprise agreements, of which there are more than a 100,000 in supermarkets and Metro. Despite this, we at Woolworths pride ourselves on putting our customers and our team first, and in this case, we feel we've let down many of our team members, and for that as an executive team, we are deeply sorry.
We're determined to make this right and rectify these payment shortfalls, is our highest priority. Affected current and former salaried team members will receive their full entitlements, including back pay, with interest and superannuation contributions as soon as possible. Initial interim back pay to affected supermarkets and Metro team members for the two years reviewed,2018 and 2019 , will be made before Christmas. We've engaged external consultant PwC to help us undertake an in-depth review of all of our award-covered salaried team members across all of our business and all of our functions. While this has begun in Woolworths Supermarkets and Metro, it will be expanded, as I say, to Big W, BWS, Dan Murphy's and other businesses. We hope to complete this review by the end of this financial year.
The complexity in the review is to understand not what we pay our salaried team members, but what they actually should be paid in light of the actual roster they work. And for that, we have to use our clock in and clock out data. This is an extremely complex process, which is why it will take as long as I've mentioned. And as we go through it, we'll be making interim payments as we complete any of analysis for any one of our businesses. We have already self-reported to the Fair Work Ombudsman and put in place an extensive plan to ensure our salaried team members are paid correct and compliant moving forward.
Taking the existing two years of data for Woolworths Supermarkets and Metro and using the initial modeling across the group, the estimated one-off impact of remediation, assuming the issue could go back as far as the implementation of the Modern Award in 2010, is expected to be in the order of AUD 200 million-AUD 300 million before tax. As I say, we will hope to complete the review by the end of this financial year, the full review, but we will certainly provide an update at the group's half year earnings results in February. Turning now to sales, and I do expect to get a number of questions on that, of course, in the Q&A, but if I could just transition to some introductory comments around sales and then come back to the Q&A.
Today, we reported group sales from continuing operations for FY1 and FY2020 of AUD 15.9 billion, up 7.1% on the same quarter last year. It has been a busy start to the year with good sales momentum across the group. Customer metrics were generally robust and resilient in Australian Food, given the above forecast sales and a number of changes we've made to our store operating model in-store. Group online sales were 37.4% for the quarter and were driven by a strong performance from both Australian and New Zealand Food. New Zealand Food sales for the quarter were AUD 10.7 billion, an increase of 7.8% from the previous year. Comp sales increased by 6.6%, driven by online and the successful Lion King movie and Discovery Garden campaigns.
as well as comparable sales growth in the same period last year. We've continued to expect sales momentum to moderate in Australian Food for the remainder of FY 2020. Customer metrics declined marginally on the previous year, with voice of the customer net promoter score down one point to 49, and store controllable voice of the customer for Australian Food down two points versus last year at 8%. Queue wait times remain an area of opportunity and have been impacted both by the higher-than-expected sales growth and our new assisted checkout experience. We completed several renovations in the quarter, including the opening of our newest Metro site in Claremont.
We expect to do 70-80 renewals in the current financial year as in previous years, and the rollout of Fresh Made Easy, which I'm sure I'll get some questions on, continued across the quarter with new equipment, point-of-sale and category range rolled out across the Woolworths supermarket fleet. To help support communities impacted by drought, we kicked off an appeal with a AUD 2 limited edition sunflower seedling kit as part of the Woolworths Discovery Garden program. We also matched every dollar raised, with the funds to be distributed to our key partners, Rural Aid, The Salvation Army, Foodbank, and Lifeline, to enable financial support - on-site support, including stock feed, additional counseling, and assistance to address food insecurity in drought-impacted areas.
WooliesX continued to deliver a strong performance with online sales in Australian Food up 42% on last year, driven by pickup growth, launching various in the Discovery and the launch of Discovery Garden. There were record sales, levels of visitors across our digital platforms, with online penetration reaching 4.5% for the quarter as we continue to make improvements to the digital experience, including the launch of our new delivery subscription model, Delivery Unlimited. In Woolworths Rewards, we recently revamped our partnership with Qantas Frequent Flyer to improve the Woolworths Rewards to Qantas Frequent Flyer point conversion rate, as well as make it much easier for customers to access the program.
New Zealand Food had a strong quarter, with strong sales with total sales increasing 4.6% to NZD 1.8 billion, driven by strong trading across fresh, health, and own brands, as well as improvements in in-store availability. Comp sales growth of 4.8% also benefited from the first two weeks of a successful Disney Words campaign and a new great price program, which replaces our historical red program, which was Locked Down and Low Price Always, Everyday Low Price. Online sales continued to be strong, with growth of 38% in the quarter and an increasing penetration to 8.5%, as Countdown X continues to focus on the user experience, including high levels of same-day convenience.
Endeavour Group sales increased 4.9% to AUD 2.2 billion, with comp sales growth of 3.2%. Sales growth for both BWS and Dan Murphy's was driven by growth across all major categories, with the strongest growth in beer and spirits, and that really was in craft beer and in particular, gin. Online sales were 21%. Online sales growth was 21% compared to last year, and online penetration increased to 6.5%, supported by the rollout of new initiatives from Endeavour X, including the launch of new apps for both BWS and Dan, and the My Dan Murphy's, or now My Dan's Loyalty Program, was also relaunched during the quarter, with membership increasing to 2.7 million members.
Big W sales increased by 2.6% to AUD 926 million in the quarter, with comp sales increasing by 4.4%, making this the sixth consecutive quarter of positive comp sales for the business. Sales growth was driven by good momentum across most customer universes, which they've seen particularly in our critically important apparel category, with good momentum across seasonal line. Store controllable voice of the customer continues to improve to 80% at the end of the quarter and up 1 point on last year. Online sales growth remains so strong, but moderated in Q1 at 21.2% after cycling 156% growth from the same period last year. Hotels sales for the quarter were AUD 468 million, an increase of 5.5%.
Comp sales increased by 3.6%, with strong growth in food and Woolies driven by refurbishments, promotional activity, and key sporting events. In summary, we are pleased with the group momentum for the start of FY 2020twenty and now focused on our preparations for Christmas and the holiday season ahead to ensure customers have the best possible experience both in-store and online in all of our businesses. We have a very busy agenda in FY 2020 across the group, including the embedding of our new customer operating model in Woolworths Supermarkets and the transition to our new automated DC in Victoria. I would like to thank our customers and team, particularly given the prior announcement for the ongoing support.
The Endeavour Group transaction is also progressing to plan with the upcoming shareholder vote on the restructure scheme on the fifteenth of December, the next key milestone. I would like to now turn the call on to questions, and may I please ask that you limit your questions to two per person and rejoin the queue if you have any thereafter.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. ... If you wish to cancel your request, please press star then two. If you are using a speakerphone, please pick up the handset to ask your question. The first question comes from Michael Simotas from Jefferies. Please go ahead.
Good morning, everyone. First question from me is relating to the collectibles program. So clearly, basket size has grown as a result of these programs. Just sort of looking at your sales mix as well as the trends through the quarter, do you think that there was a significant volume of sales pulled through to the quarter? i.e., you'll suffer that in the next quarter, or are you pretty comfortable that you've picked those up and things just moderate to a more normal level rather than giving it back?
Good morning. Thanks, Michael. Let me give a high level answer, and then I'll turn over to Claire to provide a bit more color and detail. Look, there's no question that collectibles, with a minimum of AUD 30 to get the seed or the Ooshie, drives you to a slightly higher basket size. So you clearly see a slightly higher basket size driven by that. But also growth in online, of course, also contributes to the growth in basket size because we get a much larger basket size in online. Actually, what's interesting, the strong growth in our basket size, despite the fact we're cycling the single-use plastic bag launch in March that was coming right after plastic bags.
So it was very good item growth for basket, but we don't really believe had an impact that will pull forward, a lot of sales out of Q2, and I'll turn over to Claire to provide a little bit of color to that.
Thanks. Thanks, Brad. Hello, Michael. I would echo what Brad has said, and when we look particularly at our fresh food categories, in quarter one, and also for the first couple of weeks, which clearly would be less impacted by the pantry filling, we're not seeing that kind of pantry fill up across any of our areas. Fresh food particularly gives us comfort that that hasn't happened.
Okay. That's, that's wonderful. Thank you. And then the second question from me is just relating to the comment that sales were higher than expected, and as a result, voice of the customer slipped a little bit. So it sounds like you would have put a little bit more labor into the stores if you, if you could have. Is that a reasonable way to think about it? And just sort of bearing that in mind, how do you think the stores were sort of running from a, you know, shrinkage perspective, et cetera, given you were running a little bit short on service?
Yeah, look, I mean, thank you, Michael. It would be fair to say that our sales ran above what we forecast, and we do schedule our hours to forecast. So there was that issue. But, but there's never any one issue why we get a slight softening in our voice of the customer scores, which I find useful in our business because it provides an area of focus to address going into the second quarter. As you would be aware, we moved in our self-checkouts to assisted checkouts, so, that process and the embedding of that process, plus the higher-than-forecast sales, plus changes to our operating model, meant that there was a lot going on in stores, at the same time.
The number one score that we need to work on clearly is checkout, and that is a big area of focus going into quarter two, so yeah, there's a combination of factors there. No one factor by itself would have driven the softening, but it's a combination of them, but it gives the team great focus in Q2, and we're really starting to see improvements in that regard.
Okay.
Thank you. The next question comes from Grant Saligari from Credit Suisse. Please go ahead.
Thank you. Just a first question, just to clarify some of the numbers around the wages, Brian, if we could. Would it be fair to assume that there would be a step-up in wages costs as you move the salaried team members to whatever the required payments are consistent with the award? And to do that, would we take that AUD 300 million estimate and divide it by ten, and would that be, you know, an indicative number to be working to in terms of the wages expense impact ongoing from this?
Thank you, and listen, the sales announcement, sorry, I realize I should have addressed Michael's question despite the sales announcement on the stock loss. I might come back to that at the end of this, so it is a sales announcement. We will come back at the half year and, you know, quite clearly quantify where we are tracking on various aspects of our PNL. In the context of our business, though, that is like, it will lead to clearly increases in salaries, and we've already taken action on that. But it's not material in the context of our overall numbers, which is why we're not calling it out specifically at this point, but expect more, clearly in more detail on it, as with all of our measurements at the half year, including stock loss.
I would say on stock loss, while I wanted to call out the number, we have had a good quarter stock loss, and are tracking in line with our plan. That is one of the positives clearly on sales that does help you in aggregate.
Okay, second question then maybe move on. Just, just on the sales result, I mean, you're getting some tremendous progress on your digital initiatives. I mean, your online sales in AusFood contributed 1.5% of your comps. In Countdown, it was sort of more like 2.5% of your comps. But I noticed that in terms of penetration, you are starting to bump up closer to that 10% threshold we've discussed in the past as to the limit to which you would or where you would be limited in providing online sales services through your supermarket. So just wondering how quickly you can bring forward the next stage of technology there. And you've been talking obviously about or some automation at the back of some of the larger stores.
So, I mean, it's a very interesting question that we could talk for a very long period about. As the business grows, though, we're learning more and more how to manage the capacity in store. And actually, our New Zealand business, which has a much higher penetration, is providing a lot of learnings back to the group, given if you're sort of looking at the numbers they're bumping up there, and some of the numbers in specific stores are twice that. We're learning how to manage in store without interrupting or disrupting the customer as we go. So there is a lot more capacity available to us in our stores to service e-commerce, there's no question about that.
But in parallel, as per our previous announcement, we are looking at establishing micro-fulfillment centers, and those are progressing to plan. They won't, however, make any material difference to our capacity in this financial year. It really is the next twenty one addition to our business in terms of capacity. But it's amazing, now that the business has hit scale, how much we're learning and how much refinements and process improvements we are managing to put into it, and how much additional capacity that opens.
Thank you. Thank you. The next question comes from Brian Raymond from Citi . Please go ahead.
Thanks, guys. My first one's just on overall industry growth, and I think some of the earlier questions alluded to it. But if you combine yourselves and Coles, industry growth accelerated quite materially from the fourth Q 2019 to 1Q 2020, or at least the combined growth for the two of you. Could you guys just make some comments around the outlook for the industry in terms of growth? Because obviously we've seen some better inflation trends. But do you think the majors are taking share from the independents, or do you think we're seeing just a just you know certainly a healthier level of growth across the industry?
You know, so maybe I'll leave it there, and just also if you can weave in the 5.4% exit run rate that you guys managed to achieve after your trading update in the final six weeks. That sort of still indicates a pretty healthy level of growth, yeah, just, you know, certainly into 2Q 2020.
Yeah. Thank you. Thank you, Brian. Look, I think we shouldn't kid ourselves on our numbers really pleased by the quarter, but you always need to look at the two-year comp growth to sort of get some balance to where we're at. And on a two-year basis, if you looked at our just top line sales number, 7.1 for the group, but on a two-year basis, that's about 4.5. In the context of food, really our two numbers ran for the first half at 4.9, so 4.85. So still an outstanding result, but we did benefit in Q1 across the group of relatively weaker trading the year before. And I think we certainly keep that in mind inside our business, and it's a very important contextual step.
That aside, when we come back to the growth, we did think that the growth for the sectors we participate in was relatively pleasing in Q1 across all of the sectors we compete in. I'll kind of give you a bit of, a bit of color. In food, you know, there are very different ways you can measure it. We thought the overall sector grew between 3.5% and 4% for the quarter, which was, I think, a very pleasing number, certainly slightly ahead of the long-term trend. In regard specifically to that in Q2, you may remember, Brian, last year was a very challenging quarter in food, but actually some of our other sectors as well in Q2, with very inclement weather, in particular, at this time of the year as we went into the spring carnival.
We are hoping clearly as we cycle that at a sector level, that hopefully we'll continue to see a positive growth rate, but we're not in the business, of course, of forecasting that, and I should reference the fact that it was a slightly weaker quarter last year. In terms of color to those numbers, you know, we are seeing, as you would see from our trend line, a slow move towards a neutral inflation deflation, and we've seen that happen and progress in that regard. We did actually see fruit and veg go deflationary in Q1, so that sort of pulled us back, but we're starting to see, of course, in the longer life categories, continued pressure and slow movement to a very neutral setting.
I think that's quite important to call out. We'll see how it plays through to the second quarter. We are slightly inflationary in New Zealand, as we see the same pressure apply there in food. If we go to drinks, actually, we are seeing trading up across the sector, but the number one watch out we would call out will be volume challenges really in wine, which is the lowest growth component of the overall industry right now. We haven't had a bad quarter, but it's still a bit of a challenge getting that back into growth. The real high growth coming in the more core categories, as I mentioned, of beer and spirits.
If we look inside our Discount Department Store business, inside Big W, really, it's again very hard to look at sector out of the portion of our business that has actually had the slowest growth has been really in our leisure comp sector, which is about electronics and gaming consoles and DVDs and things like that. But actually quite pleasing growth, particularly in the travel sector, and we've benefited from that. So, a very long answer to a simple question. We saw quite pleasing market characteristics in the first quarter. We are hopeful they will continue in the second quarter, but we're still very early into the quarter, and that really will be determined post Halloween as we get into the running to Spring Carnival and then, of course, into Christmas.
Great. Thank you. And then just a second one, just on Big W, actually, and the slowdown in sales momentum that you saw there. But I also noticed your average sale price implied out of your volume growth and your like-for-likes actually flipped around to be a positive contributor. So I'm just wondering how your promotional campaigns went through the first quarter 2020, and how that compares to the back half of 2019, when you saw very strong sales, but I think you mentioned at the time, quite a lot of-
Yeah, I don't mind. Actually, we don't think we had a slight sales slowdown in Q1. We didn't have a slight sales slowdown in Q1. We had a very deliberate move in mix in Q1, and I'll let Dave talk to it. So, you know, it's very broad. All of our businesses have a whole range of categories, but that's particularly true in Big W. And as we refocused our business and, you know, the whole translation of revenue into EBIT, we've adjusted where we focus and what our focus is, and we had a very pleasing performance in the categories we were most focused on. But Dave, I don't know if you want to provide any more color to that.
Sure. You know, I think the thing that we're pleased about in the first quarter is just how we're adjusting our business a little bit. So as Brad said, in audio visual, our sales growth has moderated, and typically in categories like TVs, which are pretty low margin. Obviously, electronic gaming and consoles, again, low margin. And again, we've shifted our promotional mix away from those. But pleasingly, given some of the challenges we've had historically, what we're seeing is folks-- full price apparel sales are really strong for the quarter. So, we're pleased with the momentum that we've got in there.
Thanks, Brad.
All right. Thank you.
Thank you. Once again, to register a question, please press star one on your phone. The next question comes from Richard Barwick, from CLSA. Please go ahead.
Good morning, all. Brad, I just wanted to ask a little bit more on around your new store customer operating model. You've referenced it a couple of times, and it sounds like actually implementing it has caused perhaps a few or some sort of negative impact in terms of voice of the customer. What exactly are the steps that you're taking? So what is this, the new operating model? And I guess from a customer perspective, what are they seeing that is impacting them in the near term?
Thanks, Richard. Well, I'll talk to that in detail, in high level, and then I'll turn to Claire to provide a bit more color. Firstly, I wouldn't point to that as the reason for our customer scores declining. There's a whole combination of factors, and particularly including the very strong sales, and as Claire's rightly pointed out to me and aside, those sales were combined with the need for our checkout team members to be providing or giving us either issues or seeds, which makes it an even more complex process. So I think more than one factor led to a slight softening of the scores you're looking at. The reason we called it the customer operating model is because it is a very material change for us.
We believe that it is the right thing and sets our business up for the future and is really focused on how customers are shopping us and has a number of customer benefits, but any big change is very hard to do. It's just not straightforward in a business of our size and scale. I think the key for us is that we implemented the new operating model in Q1, was a very desire to get it done then, so we could settle the team down, get all the right training in place to ensure we had a good Christmas, but there are some very material customer benefits to it that I'll turn to Claire to talk about.
Yes, thank you, and morning, Richard. To start on the customer benefits, as we said at the start, this is all very much how we can get ourselves ready for the next generation of what our customers are wanting. So the specifics around ensuring we had a salaried manager who's in charge of our convenience business was critical. Wasn't a role that was within our structure. And as we continue to see customers shop between protein, meat, and seafood, the ability to manage that through fresh service rather than the traditional meat counter, deli counter. We've also already seen, not only in the POC pilot, but now the national, which has been live for four weeks, how customers have been able to move through those counters more with the salaried management team being upskilled on all those areas.
From a team member point of view, as Brad rightly said, 10,000 team members did have the opportunity to apply for these roles. And the support that they've had in that is significant amount of training within their new areas. And we also brought all of our new fresh team roles, which were new structure to Sydney, to give them a two-day event on not only their new role and the content training of that, but also get them to understand some of all the product trends that they would want to test and trial, take that back to the store, take that back to their new teams.
Obviously, with all of that, what was absolutely critical was we gave every opportunity of our team the ability to have a role in the store, which has meant we probably moved around 600 team members into new roles in the store, and that's now what we're heavily focused on. Quite a few of those teams did go to our assistant service managers, and that's where the emphasis now is, is giving them training to be ready for Christmas.
Thanks. Thanks, Claire. For those of you who are ticking items of testing us in store, the two roles that Claire talked to, which are critical roles among many changes, would be the Fresh Convenience Manager, which looks after chilled bakery and our new Fresh Made Easy category, and Fresh Service Manager, which is the combination of our counters that we moved to on protein. So you'll see those as very critical roles and investments for the future.
... So thank you. Thanks for that, Claire and Brad. So I guess, so the point is that when you actually reference that new operating model, it is very much focused on the fresh and fresh convenience that's part of the store, nowhere else in the store?
Oh, look, there are a number of other changes that need to get adjusted in doing that, Richard, but I think, you know, at the macro level, it's a key highlight. One of the other benefits in this is that the assistant store manager really takes more direct accountability for the on-shelf availability and the long life portion of the store, which gives the store manager themselves more time to focus on both fresh and the experience at the checkout. So we really did want to also free up the store manager to spend a lot more time on the critical areas as well. So that would be the... I guess, if you're going to call out one other benefit, I think that would be the other one.
Okay. Thank you. And just the second question sort of follows on with where Brian was going with. The comment that sales growth to moderate over the remainder of the financial year, how much of that is about just recognizing, you know, the sort of the boost that you got in this first quarter, and therefore, you know, things, you're obviously not going to track along at the same run rate? Or is it a comment that you generally believe, you know, as you progress through second, third, and fourth quarters, that you'd expect growth to slow? Just want to clarify.
No, I mean, I think based on the first semester, really looking at our two-year comp numbers, you know, we've got to be. It was a wonderful quarter for our sales side, and then we had a few other challenges, but probably the kind of challenges in many ways you would rather have than the alternative. But we've just got to be very realistic as we look at the two-year numbers and as we've, you know, we've become some very meaty numbers in the first quarter.
Yeah. Okay. Understood. Thank you.
Thank you. The next question comes from Ben Gilbert, from UBS. Please go ahead.
Morning, Brad and team. Just interesting, first question may just from a strategic standpoint, you've obviously had a very strong quarter in Aussie Foods, and presumably it was probably a little bit. The response to Woolworths was a little bit better than you would have thought. So you've probably got a little bit more money in the tank, I would have thought, around sort of GP dollars, at least. I'm just interested in how you think about that strategically looking forward over the next quarter, next six months, 12 months+ .
Do you sort of sit there and take the view, "Look, we're in a strong position, we've got good momentum, let's put some more money into this business to try and really retain the customers?" or I'm just interested in how you think about strategic in terms of looking to capitalize on the momentum that you've got and potentially hold on to it for a bit longer?
Well, thanks. And thanks, Ben. I mean, obviously, it's a sales call, not an earnings call. We'll come back at the half year-
Not asking for profit. I'm just interested in how you think about retention.
Yeah, look, I think we set ourselves some very, really stretched targets in terms of the way we wanted to transform our business during the year, and really, our key focus, as always in the last couple of years, is to execute the plan. Where we come alive and we add extra things into the plan, the key thing is to execute the plan, and the key thing there is to get our customers' calls to where we want them to be, and that we're working very hard on, particularly in Q2, and just making sure that whether it's in digital or whether it's at the checkout or whether it's in our new Fresh Made Easy part of the store, that we give a great experience to our customers.
And then, very importantly, as we sort of talked about at the beginning, just coming back to our team and giving them the support they need, whether it's for training and development, given our new operating model, or just addressing this uncertainty in people's minds of whether they are eligible for a back pay. So, you know, only Q1, we know that the key quarter is Q2, and it's just really executing the existing plan, which has enough ambition in it, I think.
Just on then, maybe sort of close to the chest. Can you give us any color around customer retention? Because I think if we look back to prior year with Coles Little Shop, there's probably a lot of people driving past your stores to go to Coles, and then as soon as it ended, seems like you got quite a big bounce back. Interested in just how you're seeing customer retention, particularly some of the bigger shops like family.
Yeah, I mean, obviously, and I'll certainly provide some color, but obviously, it really does particularly impact the new and young families that were disproportionate, in particular, the others to some extent, the Discovery Garden, and so we then clearly in the quarter see more of them shopping with us than we had anticipated. So that was very pleasing, but at this stage, it's very hard to call out how the swing back will take place in Q2, and that's because we've had quite a peculiar quarter, where actually the reason is when spring falls, we've had the Lion King Ooshies program really almost overlap with the Discovery Garden program.
It's very hard at this stage for us to be very precise on what we may see happen with the customers, given the fact that these programs really ran almost consecutively with each other, if you know what I mean. But you know, the theory is, as you well know, that once the program is over, the customer switches back. It's just hard to call that out right now. It's one of the reasons we're calling out the critical importance of customer experience. If we want to retain the new, then we have to provide a great experience in store. I don't know, Claire, if you'd like to add to that?
Exactly what you said, we saw the retention continue through one collection of campaigns to another, but actually, we're quickly less than eight weeks away, literally today. Actually, our focus is on execution of the plans, and what we need to do with our customers and team.
And just a final from that, it doesn't really make sense. Does it make sense to have another collectible type campaign in Christmas when people are less focused around collectibles and more focused around just getting in and buying a whole-
You know, there's not something we could talk to because obviously, you know... but I mean, you know, we are quite sensitive, and we just want to back to back, and we need to also think about how we pulse different programs. We will always have some form of community engagement program. I think if our head of marketing was here, he would say Christmas is a community engagement program in and of itself, so you know, can't talk to the specifics, but we are quite sensitive to making sure we get the right balance, because, you know, year runs by very quickly, and then you're in the next year, so it's always been true, quite cautious and thoughtful about that.
Thanks very much.
Thank you. The next question comes from Johannes Faul from Morningstar. Please go ahead.
Thank you. Hi, Brad. I was wondering if you could give us a bit more color around the split or the mix of like-for-like sales for Metro stores and Australian supermarkets.
Look, thanks, Johannes. We don't split it out. It's something I'll take on notice, for the future. We still have a number of Metros transitioning across, Supers transitioning to Metro, so the numbers are a bit messy. In addition, with the major works that happened in downtown Sydney, given the number of stores we had there, there was quite a lot of disruption. So the numbers are noisy. So, it's very hard to be precise, but I would say that our Metro stores grew in line, if not ahead on a like-for-like basis, to supermarkets.
Okay, great. And then I was also wondering if you've seen any product mix contributing to your sales growth in terms of customers switching to more premium products?
Yeah, that's a really really good question. I'll do a higher level then I'll ask Claire. I would say very importantly it should call out is that as the new price increase on tobacco went through, we have started to see a material slowdown on tobacco sales. And so that has become a reducing mix of our business in Q1, and that's continued into Q2, so that is worth calling out. It is also worth calling out that infant formula as a component of our business is also decreasing, at least relative to the allocations we had last year.
If you look inside our business, and one of the reasons we've put in a fresh convenience manager, has been, the continued growth, in chilled products in our business as people sort of take a very broad definition on fresh. So, that's very important for us, and we. That's why we wanted to invest in team, in China. So I think those are very important. And then the other two that, which are very important strategically, that I'll let Claire talk to, have been our deliberate, continued focus on health and international foods.
Yes. Thank you, Brad. So on those two particular categories, specifically in H&B, we saw some very pleasing uplifts. You first saying that that category was also prompted by our supplier partners in the collectible campaign, which obviously drove markets in that area as well. But from a strategic point of view, our localization in health and international food and winning on key events has again continued through the quarter, which we are very pleased to see.
Thanks, Claire.
Thanks, Johannes.
Thank you. The next question comes from Phil Kimber, from Evans & Partners. Please go ahead.
Oh, g'day, Brad. Just a question, if you could just run through, you know, broadly whether you saw any material geographic sales trends in either food, liquor, or Big W worth calling out, you know, certain states doing better than others?
Thank you, Paul. Actually, you know, we have made comments in the past on quite a pronounced, sort of two-speed economy between different states, et cetera, but there's not as many pronounced trends right now as there were then. We've seen actually quite a consistent growth pattern across the country. You know, there are minor nuances at the moment, but I wouldn't overplay them at this stage. Certainly our slightly more regional stores have slightly outperformed our Metro stores, but it really is more at the margins. It's been a relatively consistent growth rate over the quarter from our perspective across all of our businesses.
Clearly, when you get to our liquor business, we saw it indexing more beers as we get into the more sunny climates and farther up in Queensland, but nothing I would call out. I'm just looking at the teams to see whether there's anything particular to be called out. Actually, quite a consistent quarter we felt for overall spend, overall consumer sentiment across both sides of the business for us.
Okay. And then just to follow up, you mentioned there, that you've seen a slowdown in tobacco post the last excise raise. Is that something that you've seen in the past? Like immediately after the excise comes through, you see a slowdown and then a bounce back, or is it a little bit different this time?
Yeah, look, it's not my core area of expertise, as you might imagine, but if I tell you what our head of buying in that area would say, clearly it's often a short-term adjustment, but this is the first time we've seen it continue on, and it looks like more of a structural change. We'll wait and see in upcoming weeks whether that is in fact true, but it does seem to be more structural than it has in the past, where the material excise has led to a short-term reduction in sales, and maybe there's been a bit of pantry stocking in the pre-excise period as well. This has gone on longer, and it's been deeper than we've seen in the past, as we specifically called it out.
Okay. Thanks, Brad.
Thank you. At this time, we're showing no further questions. I'll hand back the conference to Mr. Banducci.
Thank you, as always, everyone, for joining us on our sales call. I think the key headline message is we have pleasing momentum in sales in Q1. It really was a follow-on in many ways from the last week, six weeks of Q4, but it's all about Christmas. We have the start from the run to Christmas, with Halloween tomorrow and then the Cup. So, as always, I'd encourage you to shop our business. Patrice is in the store, and thank you for your time on the call today.