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Highlights
FY22 posed serious challenges for ASX-listed supermarket giants.
COVID-19, supply chain issues, and various acquisition challenges weighed on the share prices of retail giants.
Investors would hope that these challenges to abate as the year moves on.
Shares of ASX-listed supermarket giants traded under pressure in FY22 due to a mix of factors like COVID-19, supply chain issues, and various acquisition challenges. While investors are expecting these conditions to improve with time, inflation surge and supply constraints triggered by the COVID-19 continue to weigh on the retail giants.
Additionally, rise in prices due to recent floods and global shortages due to the Russia-Ukraine war have further increased the concerns. Investors are hoping that that these challenges would abate as the year moves on so that the supermarket operators can flourish and boost their portfolio returns.
On this note, let’s see how these ASX-listed supermarket operators have performed over the last one month.
Coles Group Ltd (ASX:COL)
The ASX-listed retail chain operator is engaged in the sale of food and groceries via its flagship supermarket chain Coles.
Shares of Coles have risen nearly 9% in the past month. Coles’ stock performed on a strong note in June and beat the benchmark ASX 200 index by over 10% in the month.
The COL share price has risen over 13% in the past six months. While the stock is up over 4% on a year-to-date (YTD) basis, its past-year return stands at more than 12%.
Meanwhile, in the third quarter of FY22 or for the 12-week period from 3 January 2022 to 27 March 2022, Coles Group’s gross retail sales rose by 3.9% to AU$9.3 billion and Group sales revenue surged by 3.6% to AU$9.1 billion.
One of the largest food retailers in Australia, Coles believes that supplier input cost inflation may continue in the fourth quarter of FY22 as well as into FY23.
Woolworths Group Ltd (ASX:WOW)
Shares of Woolworths have risen nearly 10% in the past month. The share price has risen over 3% in the past six months. While the stock is down over 3% on a YTD basis, the stock’s past-year return stands at negative 2%.
At the end of FY22, the share price of Woolworths was 0.6% lower compared to what it was at the end of FY21. For context, the ASX 200 declined nearly 10% in FY22.
The financial year 2022 was not very encouraging for Woolworths, mainly due to COVID-19. The retailer’s after-tax profit fell 6.5% compared to the prior consecutive period, largely due to the costs associated with the spread of coronavirus.
Sharing his views on the challenges faced by Woolworths Group in the first half of FY22, CEO Brad Banducci said, “The first half of FY22 has been one of the most challenging halves we have experienced in recent memory due to the far-reaching impacts of the COVID Delta strain and its impact on our end-to-end stock flow and operating rhythm.”
