Woolworths Fails to Meet Projected Growth

Retail company Woolworth has just posted its net profit and disappointingly missed its projected growth and expected earnings for the year. The company’s net profit was apparently at $1.85 billion.

The figure is lower by as much as 15 percent compared to last year’s net profit.

Experts first projected that Woolworth would profit at round $2.02 billion but trading at the stock market continued to tumble for this company.

It’s no secret that many retailers have suffered a setback the past few years as consumers have begun spending less and saving more. Despite rate cuts done by Reserve Bank, consumer spending still remain insignificantly profitable while the retail industry continues to manage with a gloomy economy.

Reserve Bank governor Glenn Stevens said that it is understandable if everyone feels the uncertainty. He added that he himself is wondering whether Australia needs to worry about what’s happening with the Greek economy.

Woolworths, meanwhile, said that the conditions with retail trading remain challenging, but they are expecting a growth of at least three to six percent by June 2013.

Other factors that affect its latest profit report also include price wars between other retail stores like Wesfarmers, which is owned by Coles supermarkets.

Woolworths and Coles dominate grocery shopping in Australia, where at least 80 percent of consumers patronize their stores. In order to encourage more consumer spending, these companies have lowered the prices of basics like milk, vegetables and bread.