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April 11th, 2013 
Peter Nolan 
Woolworths has lifted its quarterly sales by 2.5% to $14.4bn despite challenging retail conditions.
Source: AAP
AUSTRALIAN grocery giant Woolworths is considering setting up shop overseas, but won’t say where it’s looking.
Chief executive Grant O’Brien made the comments as the retailer posted a 2.5 per cent increase in quarterly sales to $14.4 billion.
Mr O’Brien said the retailer was looking to expand globally, but there were no concrete plans at this stage.
“We continue to look but haven’t been, and won’t be, specific about where we’re looking,” he told reporters.
“We’ve carefully been looking at international expansion as an option but there’s not anything imminent at this particular point in time.”
When asked if Woolworths was considering expanding into Asia, Mr O’Brien would only say that the company has had an office there and been sourcing from the continent for six years.
“It’s an important part of the world,” he said.
“It’s important for Australia and it’s important for us from a procurement point of view.”
IG Markets analyst Evan Lucas believes Asia, in particularly South East Asia, would be the best choice for Woolworths if it expanded overseas.
“It’s close to home so it’s easier to manage,” he said.
He said Woolworths could either buy into an existing Asian chain or set up its own stores.
“They would look at markets that are cheap to enter like Indonesia or Vietnam,” he said.
During the March quarter, Woolworths’ core Australian food and liquor operations, which includes its supermarket chain, increased sales by 5.6 per cent to $9.9 billion despite it reducing prices by 2.5 per cent.
Mr Lucas says the overall quarterly result exceeded expectations, with Australian food and liquor sales growth once again the stand out.
However while Woolworths’ home improvement and hotels divisions lifted sales by 37.4 per cent and 19.7 per cent respectively, those results did not meet market expectations.
Woolworths said the home improvement growth was aided by the roll out of 29 new Master stores and the completion its Hardings Hardware acquisition.
Hotel sales were boosted by acquisitions in NSW, Queensland Western Australia and changes to Victoria’s gaming regulations.
Mr O’Brien refused to give any guidance on full year earnings for the retailer.
However he said while shoppers were starting to buy more, Wednesday’s unexpected fall in consumer confidence figures showed retail trading conditions remained fragile.
“I would say that continuing improvement in sales is some evidence of customers feeling more positive, but I think we have to be guarded in how we talk about that,” he said.
Woolworths shares were 55 cents, or 1.6 per cent, higher at $34.44 at 1425 AEST.
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