Thank you for standing by, and welcome to the Woolworths Group FY24 Q1 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 CEO of Woolworths Group. Please go ahead.
Good morning, everyone. Before we start the call today, I would like to acknowledge the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation, and I'd like to pay my respects to elders, past and present. We recognize their strengths and enduring connection to lands, waters, and skies as the custodians of the oldest continuing cultures on the planet. Thank you for joining us today for Woolworths Group's first quarter sales results for the 2024 financial year. Joining me this morning are Stephen Harrison, our CFO; Amanda Bardwell, Managing Director of WooliesX; Natalie Davis, Managing Director of Woolworths Supermarkets; Guy Brent, Managing Director of the Woolworths Food Company; Spencer Sonn, Managing Director of Woolworths New Zealand; Dan Hake, Managing Director of Big W; and Von Ingram, Managing Director of W Living.
Turning to Q1, if there was a theme during the quarter, it was a moderation of inflation in our food businesses, which is critical for our customers. In Australia, the moderation of inflation has been offset by higher item growth, whereas in New Zealand, item growth has been more challenging. Secondly, we have broadly seen a continuation of customer trends from Q4 into Q1 and the start of Q2. At an overall level, customer spend remains resilient, but we have seen a slowdown in demand in more discretionary areas and a trading into our Red program and own brands from customer segments more exposed to cost of living pressures. Group sales increased by 5.3% to AUD 17.2 billion for the quarter, predominantly driven by Australian food.
Customer scores across the group were broadly stable compared to Q4, but down on the prior year. While we had notable improvements in our availability scores in food and order completeness in our online businesses, this was offset by by declines in value for money perception. Providing our customers with value remains our key focus, and we activated a number of new value mechanics for our customers during the quarter. This included our We Can Help You Spend Less campaign with Prices Dropped for S pring, the launch of Member Pricing, and our great value own brands at low prices you can rely on. Particular highlights in the quarter was the continued strength in e-commerce, with group e-commerce sales up 16%, pardon me, to AUD 2 billion in Q1, driven by WooliesX e-commerce sales as the demand for convenience continues unabated.
Weekly average traffic to group digital platforms also continued to grow strongly, up 4.4% compared to Q4, and 22.8% on the prior year, to reach 24.8 million customers per week during the quarter. Excuse me, I have a little bit of a tickle in my throat. Apologize. In Australian Food total sales for the quarter increased 6.4% in Q1 to AUD 13.1 billion, with a solid growth across Woolworths Food Retail, WooliesX, and our accelerators. Woolworths Food Retail grew by 6.1%, despite moderation in inflation, supported by strong item growth. Item growth of 2.2% was mainly driven by increased demand for fruit and vegetables and meat, supported by improved availability and lower prices, as well as by strong e-com item growth.
Woolworths Food Company's Own and Exclusive brand sales grew 7.8%, with an increase in penetration during the quarter. Long Life sales increased by 14.4%, with item growth of 4.6%, driven by particularly strong growth in pantry and household care. Average prices increased 2% in Q1, with a significant moderation compared to the prior quarter, largely driven by double-digit deflation in fruit and vegetable, with material reductions in berries, as well as vegetables such as lettuce, cucumbers, capsicum, and tomatoes. This all from better growing conditions. Lower livestock prices have started to flow through to retail prices in red meat. Excluding tobacco and fruit and vegetables, average prices increased by 4%, but we are still seeing some moderation in most Long Life categories.
WooliesX e-commerce sales increased by 18.4% to AUD 1.55 million, AUD 559 million, with penetration reaching 12%, an increase of 125 basis points on the prior year. E-com sales growth continues to be driven by a growing demand for convenience, with pickup contributing 57% of sales growth for the quarter, benefiting from our investments in Direct to Boot. We also saw double-digit growth in delivery sales, driven by increased demand for same-day orders, now 38% of total delivery orders. Delivery Now also continued to grow strongly. Cartology media sales increased by 28% in the quarter, supported by the Shopper Media acquisition. Growth in Big W and benefits from the Disney Collectibles program run in Woolworths Food Retail during the quarter.
Australian B2B sales increased by 1.5% compared to the prior year, with growth rates impacted by our exit from our international business in H2 last year. Excluding the exited businesses, sales increased by 6.2%, with PFD growing by 9.3%.... New Zealand food sales increased by 2.8% to just over NZ$2 billion. Lower inflation and item declines resulted in a slowing sales trend during the quarter. As we foreshadowed in August, the challenging economic outlook and the competitive landscape mean the short-term outlook for business remains uncertain. At this stage, New Zealand Food's H1 EBIT is expected to be below H2 FY23 and the prior year.
Now, while it is still early days, the transformation of the business announced in July is progressing well, with our new pricing mechanics launched late in the quarter showing positive early traction. Big W sales declined by 5.5% on the prior year, with a modest improvement in trend in the latter part of the quarter. While customers continue to be cautious and are trading down within categories, we've seen solid growth in summer apparel and in opening price point products that offer real value. We're also seeing customers and sales growth in the more affluent customer segments increasing as they trade into Big W. While profit in the half to date has been impacted by the decline in sales and higher wage costs, the Christmas trading period will determine the success of the half. Turning to current trading.
Sales trends in October to date have remained broadly in line with the trend line seen in Q1. We know that value for money remains front of mind for our customers in the lead up to Christmas, and we are confident in our plans to deliver great value over the holiday period. Keeping our team safe and helping all of our customers have an inspirational and affordable festive season is our key focus in the period ahead. Finally, in anticipation of the question, I want to provide an update on our voting intentions for Endeavour Group at the upcoming AGM. We propose to vote in accordance with the Endeavour board's recommendations, supporting the board and management team of Endeavour Group and their plans to deliver long-term shareholder value. We are not going to make any further comments on this issue in this call.
I will now turn the call over to the operator for questions. To give everyone a chance, can I please ask that you limit it to one question per person and then rejoin the queue with any follow-up questions?
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 two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Sean Cousins with UBS. Please go ahead.
Good morning, Brad, and team. Just a question on Australian Food. Real like-for-like sales growth improved to 3.5% in the quarter, given that quite dramatic decline in inflation. I'm just curious what's driving that volume growth. Is it population? Is it trading from out of home? And how do you square that improved real like-for-like with PFD growing at 9.3? I guess we're conscious that the consumer is quite varied, but trying to square some channel shift to grocery, and I guess how resilient that is, with what still seems quite buoyant growth you're enjoying out of PFD, please. Thanks.
Sean, thank you for managing to triage two questions into one. Let's see how I go. Good to hear from you. Look, it was pleasing to actually see item growth build back into our Woolworths Retail food business. In terms of where it came from, there are a couple of areas. Firstly, we do have some volume elasticity related to prices in fruits and veg and meat. As we've priced it down, we have seen volumes grow, which is terrific and something we aspire to do. And, you know, building more affordable, healthier Australia is something that's right on message for us. So there was some volume elasticity with price declines in fruits and veg and meat.
We also saw some trading in to Woolworths supermarkets in categories like health and beauty, where we saw customers actually start trading into us, given we are actually a value player relative to specialty in segments like that. So that was another good source of volume growth. The third source of volume growth was the increasing great value delivered through our own brands, and just very dramatic for us in the long life categories in particular, things like pantry, or, you know, household care, but just really basic value categories, where the price differential between our own brand and the branded alternative grew, and we saw customers trading into them. So really strong growth there.
I should add for completeness, that we did lose some items in the basket, and that's something we need to work hard on in general in the non-food ambient categories in our stores, so what we call everyday needs. And so that's become a very competitive part of our business, given the number of competitors who's trying to enter that segment to provide some essential and traffic drivers into their own business, including our own Big W business and everyday needs, what's growth there, but a number of other competitors. So that's what happened broadly in the store. Then Sean, on top of that, e-commerce and the growth in e-commerce really it did accelerate that, but it was great to have growth at an item level in store and then e-commerce coming over the top and really accelerating the overall growth.
With an e-commerce basket running 40-42 items and you get that nice growth, it's not hard to see how that all flows through to overall item growth. I should also add, finally, on this issue, focusing on items, and we've talked about this a lot in the last 18 months, but items, item-based productivity is something that we're very, very focused on, because we think it gives you a much clearer view of where we sit in the competitive context of the markets we operate in. Now, reconciling the PFD numbers back to the retail numbers, we are lucky, as we are in retail, that we cover all the segments of retail for food. We also do the same with PFD on food service.
So, people are trading through the different channels, but given we're bigger across those channels, we get the net benefit. So obviously, you know, airline catering, cruise ships are segments that were very low previously, and they're coming back into growth. But we're also seeing strong growth into QSR as people trade out of white tablecloth into the more value segments, in particular, young singles and couples. So that's why you can see both numbers reconcile themselves. Hope that's helpful.
Next question comes from Michael Simotas with Jefferies. Please go ahead.
Good morning, everyone. My question's on volumes as well. And just a little bit surprising to see how strong your long life item growth is compared to the fresh category. So long life volume's up 4.6, total volume's up 2.2, notwithstanding the deflation in the fresh categories and better availability. Can you give us a little bit more color on sort of what you think is happening there, and why long life volumes are so much stronger than fresh?
Yeah. Thanks, Michael. That's own brand, eh. And so sorry, apologies if that wasn't clear in the document, and that's to do with the great value that we're delivering in our own brands in long life. In particular, those we either have on our Red program, prices dropped, but even more importantly, Low Price. Actually, what was so very interesting at the moment, customers are obviously responding more disproportionately to yellow promotions, but price certainty is the other thing that customers are looking for. And, Low Price is coming into its own in many ways and giving great price certainty, and that's way over indexed to our own brand. So that's own brand growth, and it's been very pleasing in long life.
It's a bit hard to be definitive on it, by the way, in fresh, just given you know, how you count it in fresh. Virtually every product, in a way, is own brand when you get to fruit and veg, so how you count it. But that's long... own brand and the strength we are and the value we're delivering through own brand in long life to our customers.
Okay, so just, so just to be clear, that 4.6% item growth is Long Life Own Brand items-
Yes.
not own Long Life items.
Apologies for that.
Okay, so was it-
We've got word,
No, that's okay. Yeah.
Apologize.
So-
Yep.
Yeah, no, that makes more sense. So I guess the implication of that is that the fresh categories item growth is actually ahead of-
Yes.
-Long Life item growth-
Yeah.
If you include brand. Okay, thank you.
Yeah. I... You know, it makes sense, right? I mean, it is, you do get some-
Absolutely.
Volume elasticity, in particular on fruit, but actually we found it more in vegetables than I think we expected, which was very pleasing. And then as we started to adjust our meat pricing, we've seen the same happen, in particular months, actually. And then Natalie talked about in the media call, but you know, our lamb leg and great pricing there. Probably seen a bit more elasticity and volume than we had expected, which is great.
Thank you.
The next question comes from Thomas Kierath with Barrenjoey. Please go ahead.
Morning, guys. Just a question on the fruit and vegetable deflation, that -12. If I compare that to the ABS, for July and August, I think it was -5 and -8. So it looks like your prices are down a bit more than the industry. Just wondering if there's a bit of investment happening there? And I guess, like, piling that in with the price perceptions, just going backwards a bit, I would have thought if you're investing a bit more, that you might have improved on that metric. Thanks.
Thanks, Tom, and I hope the Kierath household is robust and continue to use our e-commerce services. Specifically, yeah, I'd actually need to dig into the mix. We're a slightly bigger vegetable business than we are a fruit business. We've seen more deflation in vegetables and more volume elasticity than we expected, so I'd need to go back and reconcile the two categories. We tend to bundle them together. I find them very different in all characteristics in terms of how they behave and where the inflation has been. But deflation has been mainly in vegetables for us. We've been very overt in pricing those two. They're so important to saver families. It's critical for their meal preparation, and they disproportionately index to them. So I think it'll be something more in the mix than anything else.
We want to be competitive across the entire shop. As you well know, we're obsessional on our index, and our index is in a good place across the entire shop. And, you know, that, in particular in vegetables, is one we've pulled out a bit more now. So maybe a little bit of an increased focus on it, I would say, but no overt desire to overinvest or anything like that. It's true inflation playing through.
Your next question comes from David Errington with Bank of America. Please go ahead.
Morning, Brad. Brad, can I ask a question on New Zealand? Your comments there don't, I have to be honest, fill me with a lot of inspiration. It looked like I know we talked about it. I know this is a sales call, it's not an earnings call. We talked about it, the full year, where the earnings do seem to have step changed down. I was hopeful of gaining a little bit of, you know, positive positiveness here, but it doesn't seem to be there. It seems to be a market that's continuing to decline. Can you give us a bit of an update on what's going on? And you say that the 15 stores that are rebranded, the reaction's been positive. Can you go into a bit what it is that makes you positive?
Because overall, when you say that your first half EBIT is gonna be below your second half EBIT last year, it doesn't get the year off to a great start, Brad. So if you can give us a bit of an update, as much as you can, given it's a sales call, that'd be really appreciated.
Thanks, David, and obviously, the nice thing about having a group is that you get overs and unders, and the group, as a whole, I think has got great pleasing momentum. Specifically on New Zealand, what is very clear is it is a competitive market, and more so than even Australia. And actually most of the volume challenges in the first quarter were the rest of the market. It wasn't even PAK'nSAVE, which is a very formidable value, large box player. It's the Warehouse looking for growth and indexing into the everyday food needs and-...
Non-food needs, as well as the Costco launch, best we can tell in Auckland, has gone disproportionately well and would have to be one of the best performing Costcos in terms of the numbers, as we try and solve them from the back of the envelope. So the rest of the market, there's a lot of competitive fruit and veg marketplaces as well in New Zealand, you'd be aware of, has been very competitive, and then we've of course got PAK'nSAVE. So it's been a challenging market. We then didn't lap a collectible program we had the previous year, while New World had a collectible program, and we're still cycling out the benefits we got during COVID of the e-commerce growth. So e-commerce was negative growth, unlike Australia.
So, you know, not a lot going for us positively in the quarter. Now, the things that make me excited about the business or positive about the business are e-commerce is slowly going back into growth. We flushed out where we were, and we are a market leader, and we grow and share this. So it's nice to see us go back into growth, and that really helps our business, given most of that product is picked in stores. Secondly, we've held customer traffic. In fact, it's up. It's been the basket that's been down. But as we relaunched our Yellow program, which we did during the quarter, and then our Low Price program, we replicated what we did in Australia.
We've seen a disproportionate bounce then in items back into the basket from those programs and a material change in our customer value measures. So we'll see how that goes, but it's starting to see us build the basket back. Then specifically to the rebranding, there were many risks associated with the rebrand, as you'd appreciate, David. That has gone as well as can be expected. The reason it's gone better than we expected, in the short term anyway, we've got 19 stores rebranded now, and we're starting to see dual branding on the website, is that it's not a rebranding. It is just a rebranding with price investment, with better value delivered through the business.
And so customers, if you're gonna do something, expect to get something back from themselves, and they're starting to see that, and they're starting to feel very good about that. So it's starting to get this positive roll going, going through the business. So do we feel positive about the business? Yes, David. Do we feel positive about earnings in the first half? We're justifiably nervous, given the trend lines and everything that we need to turn around, in the business, in the first half. And what we do know as a group is if we just focus obsessionally on the customer, getting the price and value metrics right, good things happen. And, you know, we'll do that. So look forward to coming back and, and hopefully seeing all of those factors start going through.
A number of other things in the quarter that it's worth pointing out. We actually launched Milkrun to a really good start in New Zealand, and that desire for ultra convenience is no different than it is to Australia. We also did a soft launch of Everyday Rewards, which is we do the more formal launch in February, which has had great resonance with our customers as well. So just a lot of great cross-trans-Tasman collaboration, which is another real positive for us.
Your next question comes from Bryan Raymond with JP Morgan. Please go ahead.
Morning, team. I'm just gonna follow up actually on New Zealand as well. Just trying to understand the components of this moderation in profitability. So for the stores getting converted to Woolworths from Countdown, what sort of return on capital or EBIT uplift are you seeing on those stores, given obviously that that's gonna be a program which continues over the next, you know, 12, 18, 24 months? Are you seeing the returns match your expectations there? And just really just keen to understand that price investment comment a little bit further within that, given you said you're cutting prices as you do it.
Yeah. Thanks, Bryan. Look, where the profit pressure comes from is it's actually the wage cost increase of 7%, you know, on the 12 we had the previous year. So we're doing a compound 19% wage increase in New Zealand, which is, I think we can all agree, incredibly material in a market that's under huge pressure on the top line. So that's the number one issue. The second issue for us has been, as we launched and relaunched our Yellow program and our Red program, they've got huge resonance with our customers, and we just need to make sure that we can balance out the GP margin impact of doing that. So just a lot of work to do.
We wanted to get the program out there, and it's actually worked better than expectations, to be honest. So we've got a bit of pressure on the GP line as we balance that out, which we can over time. And then, of course, we've got this material, and not to be underestimated, wage pressure inside the bottom line. The rebranding cost itself is really not a major driver of any of these things, to be honest, Brian, and it's still early days, 19 stores. And from what we can see, we're actually getting a bit of a sales uplift, but I don't want to call it because causation. I just don't know if it's correlation or causation.
We'll report back at the end of the year, but that's, that's not at all the driver in any of this, to be honest with you. And the rebranding just gives us a nice opportunity to reframe the business and reframe what we're trying to deliver through, as I say, a new Yellow program, a new Red program, a real focus on own brand, and so on.
The next question comes from Adrian Lemme with Citi. Please go ahead.
Morning, Brad and team. Look, just wanted to pick up on the earlier comments about customer perception dropping on pricing. I don't want to cherry-pick, but I have noticed in the drinks category, there's about a 5% premium on the full price between yourselves and your nearest competitor on the sort of major, the usual pack sizes. So I just wanted to know what's going on there, because I would've thought these are key value items, sort of, you know, it's a big category for you guys. Yeah, so just wanted to know if that's sort of playing into the price perception stuff, please.
Okay, Adrian, if there's a 5% price cap, please let us know afterwards, and it'll be addressed by the end of the day, because that's not our plan. That's not what I see in the index, but, you know, you might be seeing something where you are. So we'd greatly appreciate it afterwards if you can send us the details. It's certainly not our plan, at all. Now, it would be fair to say, the drinks category is growing very strongly, actually. It's actually growing quite strongly in own brand as people rotate out of the sugar-based into more water and sparkling water-based categories. And so we're actually seeing very strong growth in the category.
And despite what I said about you know, even the sugar-based products, it is a category that is performing increasingly, the promotions are becoming more and more successful. You know, what we're seeing is not more promotions in our stores, but higher promotional uplifts. So it is a category that's growing strongly, a lot of promotional uplifts and a lot of move into, more healthy, water-based, carbonated water-based, solutions. But, Natalie, unless you've got something different on it, we-
No, I
We've got it all tied.
Yeah, I'm not sure that's right, so it'd be good to see the details there. But, we're growing very strongly in drinks, and in particular, we've had that warmer weather from September. We've really been focused on availability of soft drinks and water, and we've had some record sales weeks. We've actually some quite strong unit growth coming through, in drinks as well. So, we're certainly feeling positive, I think, around, you know, the lead into Christmas there.
Your next question comes from Lisa Deng with Goldman Sachs. Please go ahead.
Hi, Brad and team. I just wanted to understand ahead of the important Christmas trading period, some of the nuances that we should be considering. So, I think, can you please update us on where the supply chain issues were around Christmas last year, or even absentees, and then where we're looking to be this year? And then again, it's weather. We talked just about beverages now, but, like, if there's anything that we should consider in warmer weather and also, a fifty-third week trading, if, if... Can you please confirm that that is the case as well? Thank you.
Thanks, Lisa, and, you know, 63 days to Christmas. Conceptually, availability is a tailwind for us, and we've seen, as Natalie just talked to, when we get availability right and getting sales to capacity right, and beverages has been a real tough challenge, never mind, the supply chain disruption there. When we get availability right, we are seeing nice sales growth. We can't quantify the number because a lot of our availability issues in the last two years were replicated in our competitors, so it's kind of hard to be definitive. But conceptually, we do see improved availability as a tailwind. And our availability levels, in general, are where they were pre-COVID.
So, you know, we're sort of sitting back in the high 90s in store service levels, in the low 90s or at 90 in outbound service levels, and that's true across all of our supply chains. Now, invariably, as you would read in the paper, and you would well know, there's 4 challenges we have on a day-to-day basis, and particularly in Victoria. Call it out to our Victorian team, you know, we've had a lot of the... We've had some milk disruption, actually, we've been quite lucky on the milk disruption with some of the strikes we've seen there. Had some challenges, as you'd be aware, in poultry. We've had some challenges of our own in just some of our DCs, but, in general, we're in a very good place, and there's a tailwind.
Secondly then, generally, good weather is good for families entertaining collectively at home, and you do get some sales uplift. We're very worried about the downside impact of this good weather, which could be a big fire season, and so resilience, resilience planning is in our top three priorities right now. We're doing a lot of long-term weather forecasting. We're building inventory in Far North Queensland and so on, because we're worried about the downside impact of this weather in terms of how it might challenge our infrastructure, but conceptually, the weather looks good. And conceptually, the run into Christmas and the days that run into Christmas are also actually a pretty ideal series of sequences of days. So, we're cautiously optimistic as always on this, and we just need to keep... You know, we just need to keep focused.
Feel we've got a great value plan going into Christmas. We feel we are where we need to, and we just need to continue to obsessively address the value for money issue our customers have. 53rd week.
Oh, yeah, the 53rd week, Lisa, is a second half in terms of the reporting, so it won't impact us this time.
Okay. Got it. Thank you.
Your next question comes from Craig Woolford with MST Marquee. Please go ahead.
Morning, Brad and team. I'm interested in understanding, on the Australian food business, the items per basket drop of 2.4%. Can you just give a bit more context on categories, and is this about trading down or consumers, you know, finding it tough to meet their weekly grocery bill budget? And this might be a mathematical question more than anything. Why is items growth 1.6% compared with the inferred volume growth of 3.5%? I mean, which I'm calculating as the 5.5% comp less the 2% reported inflation.
I'm gonna answer the first question, and then I'm gonna get Paul to come back to you separately on the second question. You're looking at comp numbers, by the way, and we've just been looking at standard numbers, so I'm sorry. I think there'll be something in the, the comp versus group. But let me give you some color and build on the question, Craig, we had from Sean, if, if that's okay with you.
And what, yeah, what's right in the basket? So you know, what we've seen actually is the store basket has gone down ever so slightly in Australia, far more dramatically in New Zealand, actually, if you look at the delta between the two. The store basket has gone down. Actually, the online basket came down a bit, but we adjusted a few of our minimum order sizes, and it's gone back to where it was. Came down to about 40, I think, Amanda, it went back to 42. But the store basket has come back a little bit in Australia and more dramatically in New Zealand. I guess if there's a, and that's by the way, also true inside Big W, where the basket has come back.
If there's a positive in all of this, the customers are in our stores, they shop in our stores, therefore, our ability to hopefully influence the basket is there. It's when they don't shop here that you've got a major issue, but there has been a trimming in that. Interestingly enough, as you'll see from the numbers, actually, our visitation to our store has gone up ever so slightly, so, you know, they're shopping smaller, but more often, which is a trend we saw pre-COVID, so that needs to be taken into account. If I then look at what's happening in that basket, and we talked about it earlier, there is volume elasticity related to reduction in price, particularly in fruit and veg, but also in protein. So we've seen some nice bounce in the volumes in those categories.
And then if you look into the rest of the shop, it can actually be explained by people making value decisions. A topic we haven't talked enough about, but it's actually one of the highlights, I would say, in that of the quarter, has been the growth in our in-store, in-store bread business, prop bread, in-store bakery business, sorry, not prop bread, which has really grown very nicely. Now, you're getting a great fresh loaf at whatever it is, AUD 2.70, and cheaper than buying a prop loaf, and we've seen people really resonate with that. Worked very hard on the quality of that, and so that's really, one of our most interesting item growth numbers. But customers are seeing freshness and value, and they, you know, they're acting with their basket, which is good.
If I move into the long life sections, as we talked about earlier, Craig, actually, health and beauty has shown some nice growth for us. That's customers really trading into us. We drive great value there, and we've talked about this case study of MCo, which is a very strong brand for us. It's a beauty brand. We've seen it grow strongly, actually, in supermarkets and Big W. That's now in both, and seeing the higher resonance as people trade into those types of categories. In our pantry sections, our own brands are working very hard. Actually, our number one rated product on the Bunch is Essentials Caster Sugar for baking at home, and people love it. It's great value. There's a great price point there.
We've seen those products, you know, generate high double-digit growth, and just delivering to value there. So there's a story in each one of those categories. Where we have got item pressure then is in these non-food, long-life categories, what we call everyday needs, and that's where we're starting to see a much more competitive market. It's about 15% of our total sales in our store, everyday needs. It's a, and, that- that's where, you know, we've seen a lot of other retailers trying to get into essential category businesses to drive traffic, and so it's become a really, a more challenging part of the basket, but I, I wouldn't want to, to overplay it. So I, I think in general, a positive story.
We actually built this back up by customer segments as well, and in general, we are holding our basket in our core customer segments, but it's in those cross shoppers that we are starting to see that basket, what we call an essential customer. So anyone who's desired to cross shop and will be doing more of that and checking catalogs, and so on. So that's Australia. New Zealand has been far more acute as we've lost a lot of these everyday needs again, and that's been into the Costcos and the Warehouses and everyone else in this world. And it hasn't had the same defensive characteristics with the online, which is, which has now gone back into growth actually last week, which is terrific.
We've finally flushed through the COVID disruption there, but it hasn't been quite as clear story. In terms of reconciling the numbers, I'll leave that to Paul, if that's okay with you, Craig. I think it's gonna be coming back to the comp items versus the absolute items. I mean, Brad, I can answer it quickly. I mean, the productivity metrics, so the transactions, either for basket and items are based on comp. Our reported inflation is a volume-adjusted metric. It's not the same as our average sell price, which has mix in it, and so, I think that will be the difference.
Your next question comes from Richard Barwick with CLSA. Please go ahead.
Thanks, Brad and team. Can I just pick up on your comment? You're saying the value for money perceptions that are impacting all retailers. Do you have some metrics that you can share on how Woolworths' value perceptions compare to other retailers, or at least give us some comfort that Woolworths is performing, you know, relatively better or no worse on a relative basis? Yeah. Thanks, Richard. It is a topic we talk about not once a week, but once a day. So firstly, and I've appreciated the question earlier from Adrian on maybe some pricing issues we might have. We'll check. It might just be the Container Deposit Scheme, actually, is... That's causing some of the comps that you were talking about, Adrian.
But, Richard, our, our price index is as good as it's ever been relative to our competitive set. So we are very focused on that price index versus Coles, Aldi, and then we actually run it now against specialty retailers as well, just to make sure we don't miss anything. So our index is, as strong as it's, ever been in a reality sense, and we look at shelf, as you know, and then we also look at, promotional and a basket-type index. We actually even do an essentials shopping-type index as well, just to make sure we don't miss anything there. So the index is good. In terms of relative price perception, actually against our, our key competitor, we're in as good a place as we can remember as well in terms of where we are in a, in a relative sense.
So, that's, that's very important. And when we talk about value for money, it is, it's declining for everyone, and I deliberately use it because you could gild the lily, but it's to remind ourselves of what we need to do for our customers. And they can see the prices going up, they're under pressure, and we need to remind ourselves. Yeah, in a relative sense, we're actually well positioned, as well positioned as I say, we've been, you know, since I've been around. So, you know, we look forward to continuing to hold that going into Christmas.
Your next question comes from Ben Gilbert with Jarden. Please go ahead.
Good morning, all. Just a question, Brad, just around digital and loyalty. So you've obviously put the reward pricing in sort of through the period at the end of last quarter, last period, and you've seen a pretty big lift in traffic and scan rates. Just wondering, at one, what's the difference you're seeing in terms of, say, average discount for just a non-member versus a member? Is it a couple of points? And two, when do you think you really start to sort of hit your straps in terms of getting benefits with that Member Pricing? Because I know if we look to the UK, it's probably taken Sainsbury and Tesco probably 12-18 months to really see the big gains, which we've obviously seen in the last 4-16 weeks of their trade.
Just how you're feeling about your impact around Member Pricing, pricing perception there and driving loyalty.
Thanks, Ben. Firstly, I'll just start by saying our Everyday Rewards membership continues to grow and become more engaged with us, and we're starting to see material lifts in their loyalty and relative performance against other loyalty schemes. So that's our number one goal, something we're very, very focused on. It's interesting to see how many more of our Everyday Rewards members are using our app on a weekly basis, and it's got just this terrific growth and engagement as an app. So that's key. Everything else needs to be seen in that context.
Now, Member Pricing, which is an addition to the personalized offers we provide our members, which they get, which are tailored to them, which we send to them directly, was something we wanted to overlay on top of these personalized offers so that when members walked into store, they went from customer to member mode, and they started behaving more as a member than a customer. So it was another way of doing that. We're still very early in terms of rolling out Member Pricing, to be honest with you, Ben, so I wouldn't want to overplay it. I'll come back and make some comments. But what we're learning will help us make sure it's a good and compelling part of our program going forward, but it adds to our personalized offers.
If you think about the UK, we're trying to stitch together the learnings between what you would see in a Nectar with a Sainsbury's, with a One Card with a Tesco, with a cashback program out of an Asda. We're trying to take the learnings out of all three and create them into a composite for us. Each one of those is, I would say, yeah, much more focused or narrow. We want to take the best out of each one into our program. But our members are spending more with us, they're feeling better about us, and they're cross-shopping across our brands, which is terrific.
The number one success, actually, if you don't mind me saying, on Member Pricing happened last week, I think it was, where we actually did a great member price offering, Big W, on Halloween. Do I call it apparel? Costumes.
Yes.
We really saw a great resonance, and that was exciting for us because it gave us a clue on the kinds of things we should do with Member Pricing. But I, you know, I don't want to overplay it, Ben. It's still very early days, and we'll build the program as we go.
The next question comes from Phillip Kimber with E&P Capital. Please go ahead.
G'day, Brad. Just a question on store demographics. I know you've, you'd released Woolies Supermarkets, Metro, and eCom, but within your Woolworths Supermarkets, I mean, I assume you've got sort of more discount demographic stores versus more premium. Are you seeing noticeable trends or difference in trends across those demographics by store?
Yeah, thanks, Phil. We run core value and up stores, and then they're derivatives of those, which basically reconciles to budget mainstream premium with some nuances. I'll let Natalie talk to the differences we've seen, which over time we would expect to become slightly more pronounced.
Yeah. So, just stepping back, we think of our fleet of supermarkets across value, core, and up demographics, and we monitor what happens, what our customers are expecting from us in those, demographics. But we also tailor the ranges of our stores, to make sure that the customers can find what they're looking for. So what that might mean is in a value store, we would open up more shelf capacity on our own brand and our opening price points, and make sure that we're really supporting specials as well, which we know our customers love, with a lot of space and bold, merchandising. So we are seeing differences across the fleet. We're seeing, you know, strong growth in, fresh items across all our different demographics.
As I mentioned before, there's a skew towards vegetables, in particular in our value stores. So they're growing even more strongly than the average store, so customers are really looking for that. There's also more Own Brand participation in our value stores, and that continues to grow. So our value store customers are finding great quality at those entry price points, and in particular, products that fill the pantry. So canned vegetables, rice, pasta, you know, very popular, the basics like sugar, as Brad mentioned. Everyday chilled as well, milk, cream, blocks of cheese, grated cheese. You can see that growing very strongly across our fleet, but particularly in value stores.
And in our up stores, we do have the highest item growth, so we are seeing more trade, we think, out of the home or potentially from independents into Woolworths Supermarkets for more value. And we are seeing slightly higher growth in red meat, in particular, in our up stores. So there is some differentiation. We're very much focused on making sure that customers can find value in our stores, whether they're an up customer or a value customer.
Thanks, yes, Paul, just to complete what I found very pleasing in the quarter was actually good item growth in our value stores, which is something which we really had to work hard on, and it was great because that's where you've seen that move, of course, to even more value. So that was one of the highlights of the quarter.
Your next question comes from Scott Ryall with Rimor Equity Research. Please go ahead.
Hi, thank you. Brad, I know this is a quarterly call, but my question's actually directed just straight to you at the moment, and just to check in on how you're doing the fire in the belly and how much you're enjoying executive roles, given your name's been bandied around in the press a couple of times around board roles. So I was just hoping you could give us an update on your hunger levels, because I think that would, that's quite meaningful, perhaps more meaningful than a quarterly sales result. Thank you.
Thanks, Scott. I couldn't be more excited about what we're doing at Woolworths, in truth, and I'm sitting here with all my colleagues who please, no, none of you need to answer this question yourself. We're all excited about what we're up to, actually, at Woolworths right now. We've got a great plan, and it's working, and we've always got more to do and... but it's interesting, exciting, passionate stuff that makes a difference to Woolworths as well as to Australia and New Zealand. So I'm feeling very energized, and I know my colleagues are at the table feeling likewise. Can't wait for Christmas. Bring it on.
Brilliant. Thank you.
Your next question is a follow-up question from Michael Simotas with Jefferies. Please go ahead.
Thanks for taking another one, and I apologize upfront for picking on the language of the release. When you talk about trends in the second quarter so far, the language is a bit different to what you've said in the past. So you've said consistent with the trend lines. Food has been slowing a bit. New Zealand's been slowing a lot. Big W's improved a bit. Should we assume that that means that rate of change has remained pretty similar, or am I reading too much into that?
Well, thank you for picking up a word I put in, and Paul warned me you would ask this question of trend lines.
Any day.
The trend line in the context of the quarter more than the trend between the quarters. If I look at the trend line in the quarter, Michael, what you're seeing is actually, if in Australian food, you're seeing an acceleration actually of e-commerce as we exited the quarter and went into the new year. So the trend line of e-commerce getting back to what it used to be and being a very strong growth vehicle has continued, continued through. And so, you know, that's, that's, that's been our key trend line we'd observe in in Australian food. Inside and, you know, New Zealand, we're still having this challenge on on item growth, and that has not abated during the quarter.
Although just in the last week, as we started to get the impact of our yellow and Red programs, that's slowly starting to change. And the most interesting thing on the trend line there, again, was e-commerce, which was negative during the quarter versus Australia, but it became less and less negative, and it's actually just gone positive in the last week. So that's a really important trend line issue for us. Big W actually was negative and but as we came out of the quarter, not only do we have summer apparel being positive, but some of our states have gone positive in growth. And we're hoping, of course, down the big states to go positive as well.
But we've seen a nice trend line there at a store level, but actually also at an e-commerce level, and e-commerce has gone green as well for us. So there are some nuances in there, but it is to just pull out those trend lines. E-commerce being the main one, but then as I say, inside Big W, actually store trend lines as well, and most recently inside Big W, New Zealand's item trend line, not sales trend line yet.
Thank you. That's really helpful.
The next question is a follow-up question from Lisa Deng with Goldman Sachs. Please go ahead.
Hi, thank you for taking another one. Just wanted to, again, like, think a little bit about anything that could potentially blindside us, especially during the busier seasons. Can we get an update on where theft is? And also, are we observing any, if at all, impact from GLP-1? Thanks.
Thanks, Lisa. Look, retail theft, which is a topic, a word I'd actually hadn't heard until the last quarter. I'm not saying I like the word or what we would call stock adjustments. We haven't seen any pronounced trend in that. In fact, it's slightly down from where it was as we started the quarter, and that's because of a lot of initiatives we've put in place during the quarter. So we're not seeing a trend, a negative trend line there. The one we called out in our announcement, particularly in the media call, now just call it out to everyone here, has been acts of aggression and violence to our team, and they have gone up materially. You know, we really need to work hard on that.
So team safety is disproportionately important to us versus stock adjustments or retail theft right now. That's our big issue and risk. We, you know, people are under pressure, but it's inappropriate to express that pressure to our team in store. No, not on that issue. On GLP-1, there's nothing to... You know, we read all the same overseas reports you do, but there's no ability to call any trend line here right now, given the cost of it in Australia, the availability, as well as the injectable nature of it. So, we've— You know, we read the same reports, but there's no demonstrable trend line that we can see in our business, and it's still very nascent in the context of the Australian market.
Thank you.
The next question is a follow-up question from Craig Woolford with MST Marquee. Please go ahead.
Hi, Brad and the team. Just a quick one on Cartology. It was including the Shopper Media, that revenue was up 28%. What's the growth excluding Shopper Media?
Oh, Craig, it would have been in the same... It was strong. It was strong.
Yeah, it'd be high teens, Craig. So, you know, we acquired Shopper in the end of the first quarter last year, and so this will be the last time we'll need to report Cartology excluding Shopper, because it'll be in our comparables from Q2, but high teens. Otherwise, yeah, the Disney Collectibles program was very strong. Digital media was very strong. So the underlying growth in Cartology, excluding Shopper, continued.
Right. Thank you.
Thank you.
There are no further questions at this time. I'll now hand it back to Mr. Banducci for closing remarks.
Thank you, everyone, for all of your questions. You know, as we said in the media call, 63 days to Christmas, it's all about the trading into Christmas. We've got a lot to be excited about. We're excited about our plans. We're excited about our great range that we get to put into stores, already putting into stores for Christmas, and the customer reaction to those. So, the truth is in the store. Look forward to seeing you in our store shop. Often shop big and make sure you give us feedback on the way through. Thank you, everyone.
That does conclude our conference for today. Thank you for participating. You may now disconnect.