Inflation accelerated 7.3 per cent for Australian food prices in the last quarter, supermarket giant Woolworths said on Thursday.
Woolworths said its first-quarter sales were up 1.8 per cent to $16.4 billion, compared to a year ago, thanks to a strong contribution from Big W and its wholesale food business.
Australian food sales were down 0.5 per cent to $12.2b, but Big W sales were up 30.1 per cent to $1.2b and business-to-business sales were up 26 per cent, also to $1.2b.
"We continue to see early signs of customer purchasing habits changing but it remains unclear how much of this relates to cost-of-living pressures compared to COVID normalisation," chief executive Brad Banducci told reporters.
Some customers who shop to a weekly food budget are substituting cheaper items, such as buying chicken instead of red meat, but this isn't a pronounced trend as yet.
"It's early days, a more major trend is a post-COVID normalisation of how people are shopping," Mr Banducci said.
Sunday has returned as Woolworths' busiest important shopping day and e-commerce sales fell 14.5 per cent to $1.6b during the quarter, compared to a year ago.
On a three-year basis, e-commerce sales growth is still strong, however.
Woolworths on Tuesday announced it would deliver a selection of seasonal favourites and entertaining essentials to the same price or less as they were last Christmas.
Mr Banducci said that supply chain issues remained an issue, frozen vegetables in particular, with Tasmania producing a poor crop of corn and potatoes.
"That's also flowed through to some Woolworths crisps," he said, adding that we didn't want to "overplay" the problem.
