After suffering poor sales in the first seven weeks of the financial year, Woolworths has blamed the decline on customers adjusting to the ban on single-use plastic bags that they imposed in June.
The company’s group chief executive Brad Banducci reportedly said Aussie shoppers had a worse reaction to the removal of single-use plastic bags than they originally anticipated, with the supermarket even temporarily reversing the ban to begin with to allow shoppers extra time to adjust to the new rules after receiving complaints.
The comments come after the supermarket giant said same-store sales growth in the first quarter of the 2019 financial year was tracking at 1.3 per cent, down from 3.1 per cent in the last quarter of 2018.
“So a really challenging start this is on the back of a couple of factors: firstly it has been more challenging than any of us anticipated to phase out single-use plastic bags and that has – we’re getting better and we’ve seen our scores improve with customers on that, but it was a challenging start to the year,” he said.
Miniature collectibles from competitor Coles were also blamed for causing the drop. “And then secondly, very importantly there’s been a lot of movement in the context of continuity programs,” Banducci added.
The Little Shop promotion allows shoppers to collect 30 replicas of grocery products, including Vegemite and Nutella jars for every $30 spent at checkout. However, customers around the country have gone into a frenzy trying to collect them all, with the complete set now selling on eBay for up to $1,000.
Speaking to The Australian, Banducci said the negative reaction from shoppers took Woolworths by surprise.
“Single-use plastic bags, I think we all … the impact and the time for customers to get used to it has been greater than any of us have thought,” he said. “And we do have a few things we would differently the second time around, in terms of how we try to holistically solve this for our customers.”
Woolworths officially banned single-use plastic bags from stores in June. Since then, the supermarket giant has tried to ease the transition, including handing out reusable plastic bags for free and rewarding shoppers with points if they brought bags from home.
However Woolworths said it expected sales to improve over the next few months. “But it’s still early in the year, we still feel very confident about our plans,” said Banducci.