Woolworths struggles to win back ‘price trust’ from customers – and investors – as Coles’ value rises
Woolworths has shed more than $5bn in market value as it struggles to regain customer “price trust” and stretches product availability.Australia’s biggest supermarket chain on Wednesday reported sales rose 3% in the year to June and 2% in July and August compared to the year before, while profits in 2024-25 fell by a fifth, to nearly $1.4bn.Its market value slipped from more than $40bn to less than $35bn on Wednesday, while Coles rose to a record value of $31bn.Coles has attracted a greater share of sales, recording faster growth of 4% in the year to June and 5% in July and August on the year before, lifting annual profits to more than $1bn.
Woolworths cut the shelf prices of 500 items in 2025 in a bid to regain customers’ trust and improve public perception, but chief executive Amanda Bardwell told investors sales momentum was yet to pick up.“That was always about a long-term investment … to build price trust after a very disruptive 12 or 18 months, so that will take time to flow through,” she said on Wednesday.Short-term boosts such as Woolworths’ Disney Discs promotion in July had also underperformed, Bardwell said, blaming it on customer “fatigue” after running collectible programs “multiple, multiple times”.The company forecast supermarket earnings would grow slower than market expectations, with price cuts to sap $100m.One analyst said the slowing shopper momentum signalled customers were switching from Woolworths to Coles.
“That’s $100m of earnings they’re basically sacrificing to lower shelf prices to rebuild customer trust [and] Coles will be looking at this and thinking … ‘how we can respond?’” said Lochlan Halloway, an equity markets strategist at Morningstar,“Coles is taking share from Woolworths … and I don’t think [investors] can see, at the moment, a credible path for Woolies to close the gap,” he said,Michael Toner, an RBC Capital Markets analyst, agreed that Woolworths’ ongoing underperformance suggested the company was continuing to lose market share to Coles,Stock availability issues at Woolworths had impacted perceptions and customer satisfaction, with consistent shortages on Sundays, Bardwell said on Wednesday, citing the impact of industrial action at Woolworths’ warehouses,Coles’ product availability, meanwhile, has been boosted by new centres distributing products to supermarkets and online shoppers, Coles’s chief executive, Leah Weckert, told investors this week.
“Our availability metrics are probably now at the best we’ve seen them since pre-Covid,” she said,Weckert said product delivery had helped Coles take advantage of “green shoots” in consumer spending, as household budgets recover and inflation and interest rates ease,“[Customers] are still very cautious … so entertaining at home, eating at home instead of eating out, shopping at multiple retailers: that’s all still quite prevalent,” she said,“You put those three things together and that’s a combination that’s working quite well for us as a supermarket,”Coles’s pre-tax margin on earnings rose to 5.
3%, with its expanding distribution centres helping cut costs to get products in stores and to online shoppers, and stock loss declining.Woolworths’ pre-tax margin slipped to 4%, as theft and product waste rose and customers swapped from their typical purchases to cheaper alternatives, according to the company.Investor sentiment could turn, however, as Woolworths’ price cuts brought back customers, Halloway said, noting neither was likely to lose market dominance.“These are century-old businesses, and every now and again, one’s going to outperform the other,” he said.“They’re the dominant players, and I don’t expect that to be eroded.
”Both supermarkets have faced pressure in the last year over findings they hiked prices during a cost-of-living crisis to boost profits and are defending legal proceedings over allegations they misled shoppers by offering “illusory” discounts on hundreds of common products.
Confidence drops across UK services in face of higher costs and weak demand
Business confidence plunged this month across the UK’s services sector as mounting cost pressures and weak demand hit profits and undermined the outlook for the rest of the year.The CBI’s latest service sector poll found that a majority of companies were gloomy about their prospects and discounted the acceleration in activity that usually follows the return to work after the summer break.Falling sales and rising costs meant most firms were suffering a profit squeeze, the CBI said, leading to lower hiring and cuts to investment.Consumer services firms reported a negative outlook for the eighth consecutive month while services companies that sell to other businesses reported a decline in activity for the fourth consecutive month.Optimism about the general business situation deteriorated, though the panic induced in the previous quarter by Donald Trump’s initial tariffs was much reduced
Ryanair to raise bonus to €2.50 for staff who spot oversized cabin bags
Ryanair will pay airport staff increased and unlimited bonuses of €2.50 for every non-compliant carry-on bag they take from passengers, the airline’s boss has announced.Passengers whose cabin cases exceed the maximum dimensions for a small suitcase are charged fees of up to £75 and their luggage is taken into the hold.The fines have outraged some travellers, especially when it emerged that staff at the boarding gate have been incentivised to spot oversized bags.However, an unrepentant Michael O’Leary, the chief executive of Ryanair, said the airline would be upping the bonuses to keep baggage to the correct size
US parents and teachers: share your experiences of AI in schools
Students in grades K-12 have been invited by Melania Trump to take part in a nationwide contest designed to encourage the use of artificial intelligence (AI) tools to help solve community issues. The first lady wants students to “unleash their imagination and showcase the spirit of American innovation” by participating in the government-sponsored contest.We want to hear from parents and teachers on their experiences of AI in schools. How do you feel about it being used in education? Do you support it or are you against it?You can tell us what you think of the use of AI in schools by filling in the form below.Please include as much detail as possible
Half of UK adults worry that AI will take or alter their job, poll finds
Half of adults in the UK are concerned about the impact of artificial intelligence on their job, according to a poll, as union leaders call for a “step change” in the country’s approach to new technologies.Job losses or changes to terms and conditions were the biggest worries for the 51% of 2,600 adults surveyed for the Trades Union Congress who said they were concerned about the technology.AI is a particular concern for workers aged between 25 and 34, with nearly two-thirds (62%) of those surveyed reporting such worries.The TUC poll was released as a string of large employers – including BT, Amazon , and Microsoft – have said in recent months that advances in AI could lead them to cut jobs.Britain’s job market is slowing amid a cooling economy, with the UK’s official jobless rate at a four-year high of 4
US Open tennis 2025: injured Draper withdraws, Raducanu on day four – live
Righto, that’s us done for today. Join me again tomorrow at 4.30pm BST, for more ridiculous behaviour, but until then, peace out.Another nails serve and Norrie seals the win, at the end of a pulsating, wild and banging match. Next for him: Djokovic
Fritz, Pegula and Navarro lead American charge into US Open third round
Taylor Fritz overcame a jittery start, Jessica Pegula extended her run of consistency and Emma Navarro continued to build on last year’s breakout season as all three Americans advanced to the third round of the US Open with convincing victories on Wednesday.On a breezy afternoon at Flushing Meadows, Fritz recovered from a sluggish opening set to defeat South Africa’s Lloyd Harris 4-6, 7-6 (3), 6-2, 6-4. The fourth seed, runner-up here last year, was forced to navigate a tricky test against the big-serving Harris, who has been rebuilding his career after injuries saw his ranking plummet outside the world’s top 300.Fritz dropped serve early and ceded the first set as Harris’s forehand found its range. But the American steadied behind his own delivery, pounding 17 aces in all, and dominated the second-set tiebreak to level the match
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