Woolworths Ltd., Australia’s largest supermarket chain, slumped after its core sales growth measure increased at the slowest pace in three years.
Shares in the Sydney-based retailer declined 3.6 percent at 11:17 a.m., on course for the biggest drop since March 2. Third-quarter sales from Australian food and liquor stores open at least 12 months rose 0.2 percent when adjusted for Easter from a year earlier, Woolworths said Wednesday, compared to a 3.4 percent pace of growth at Coles.
Woolworths is cutting 800 jobs and ploughing A$500 million ($397 million) of cost reductions into reducing prices amid competition from Coles, owned by Wesfarmers Ltd., and local outlets of German discounter Aldi. It’ll reduce investment in its Masters hardware chain and Big W hardware stores to spend more on the supermarket business, which makes up about 93 percent of operating income.
“You don’t go from being a zero to a hero in five minutes,” Brad Banducci, managing director of Woolworths’ food group, told an investor conference after the announcement Wednesday. “We have the mandate to do what is required to get our customers to put us first in the shopping process, and we will not be beaten on price.”