Australians are swapping their shopping allegiances, with Woolworths losing ground to smaller supermarket rival Coles after years of market dominance.
And investors are losing patience.
Woolworth’s shares on Wednesday afternoon were on track for their biggest decline in many years, falling 13 per cent after posting a financial performance CEO Amanda Bardwell said was well below its expectations.
It’s a stark contrast with Coles, whose shares have climbed more than 11 per cent since Tuesday morning, when the supermarket and liquor group beat earnings expectations almost across the board.
Woolworths said that for the first eight weeks of 2025/26, Australian supermarket sales excluding tobacco were up four per cent compared with the same time last year.
RBC Capital Markets analyst Michael Toner pointed out Coles on Tuesday reported supermarket sales excluding tobacco products were up 7.0 per cent over the same period.
That was a big difference, he said, adding Woolworths “appears to be losing market share to Coles”.
The results show Woolworths falling behind Coles, Jefferies deputy head of equity research Michael Simotas said.
“You’re clearly lagging your major competitor by a fairly large margin, probably the largest margin we’ve seen in quite some time,” he commented on an analyst call.
Sales were up 3.6 per cent to $69.1 billion, but earnings before interest, tax, depreciation and amortisation fell 3.5 per cent to $5.7 billion on a normalised basis.
Coles shares were set to close at their highest level on Wednesday, while Woolworths’ WOW shares were on pace to finish at a five-month low.
Adding insult to injury for its shareholders, Woolworths announced it would cut its dividend by 21.1 per cent after its net profit fell 17.1 per cent to $1.39 billion.
Woolworths said the drop in profit reflected higher finance costs and lower earnings, which were hit by a number of issues.
Industrial action in the first half cost the group $95 million, and it spent $73 million in dual-running costs as new high-tech warehouses get up and running.
Woolworths’ cost of doing business also rose, mostly because of a 4.25 per cent wage increase for Australian retail team members.
In addition, it posted $569 million in impairments, including writing off $346 million from the value of Big W after a financial performance below expectations.
A Disney Discs collectibles campaign had also underperformed, Ms Bardwell said, blaming collectibles fatigue among consumers.
Coles CEO Leah Weckert in contrast a day previously had credited its Harry Potter Magical Discs campaign with helping lift sales.
Coles said theft declined in 2024/25, while Woolworths said it had increased during the second half, along with acts of aggression against staff.
Woolworths will pay a 45c final dividend, down from last year’s 57c payout, while Coles kept its final dividend steady.
Etoro analyst Josh Gilbert said Woolworths’ dividend cut would be “a kick in the teeth for loyal shareholders who’ve endured zero growth from shares in the last five years, and that won’t do much for confidence”.
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