Woolworths New Zealand reported a $32 million net profit after tax for FY26, with the supermarket business pointing to cost control and continued investment in customer value.
However, its full-year improvement included a weaker second half, when changes to store operations disrupted trading.
In its response, Woolworths acknowledged that a key driver of the year-on-year change was the comparison with one-off costs incurred in the previous year. It described the trading environment as affected by persistent cost-of-living pressures and increased retail competition, which softened sales momentum.
Sales for the New Zealand Food business increased 2.5 percent to $8.49 billion, while earnings before interest and tax rose 8.8 percent to $163 million. The EBIT figure represents operating earnings and is a separate measure from the $32 million after-tax result.
The second half was more difficult. Operating earnings fell 7.7 percent to $63 million, with the group reporting that customers’ search for value and disruption from its new store operating model affected sales growth and the shopping experience. Higher waste and markdowns associated with the changes also contributed to pressure on gross margins.
Woolworths said it had embedded its largest store operating model change in two decades and that customer feedback showed a positive response to improvements in stores. Managing Director Sally Copland said affordability remained central to its approach.
“We know every dollar matters to Kiwi families right now. That’s why we’re focused on keeping everyday essentials affordable and absorbing cost increases wherever we can to protect our customers' budgets,” said Copland.
Copland said efficiency was necessary to support both customer value and a sustainable business. She also pointed to the company’s investment in New Zealand.
“Woolworths New Zealand remains a long-term, committed overseas investor having invested $1.5 billion of capital into the New Zealand market over the past five years.”
The result comes amid continuing scrutiny of supermarket competition. The Commerce Commission’s latest Annual Grocery Report, released earlier this year, found that the major supermarkets retained 82 percent of the national retail grocery market and that competitive pressure was not meaningfully increasing.
The report also highlighted differences in profitability between the supermarket businesses. Woolworths’ operating and after-tax profit margins had declined while it invested in its transformation programme, before stabilising in FY25. Foodstuffs North Island and Foodstuffs South Island remained at the upper end of the report’s international comparisons for both measures.
For Woolworths, the next test is whether the operational changes can deliver consistent improvements in availability, service, and value while restoring sales momentum. The weaker second half showed the difficulty of implementing those changes while customers remained focused on price.
More from Woolworths here
