Grocer wary of legal stoush

Headshot of Sean Smith
Sean SmithThe West Australian

Woolworths has defended its use of petrol discount vouchers in the face of the competition regulator's concerns, but hinted it would rather rein in the shopper dockets than engage in a legal battle.

The grocer's chief executive, Grant O'Brien, said the dockets were just one of its "promotional levers", albeit one which has proven very successful in luring shoppers into its supermarkets.

"In this environment where there's such pressure on household budgets, how can it be a bad thing to offer discounts," Mr O'Brien said.

"Customers have been enjoying these discounts . . . for 17 years, they vote with their feet.

"It's an important promotional lever for them, as it is for us. But if it were to change we'd manage it."

On Monday, Australian Competition and Consumer Commission chairman Rod Sims expressed increased concerns about the petrol dockets, some offering discounts of up to 45¢ a litre, on the basis they may be undermining competition in the fuel retailing sector.

His comments suggested the ACCC will move to at least restrict the size of the discounts once its year-long inquiry into the vouchers winds up in the next couple of months.

Mr O'Brien, who had earlier released Woolworths' fourth-quarter sales results, said if restrictions were introduced, the group would redirect the money into discounts on other products.

"I don't have a 'see you in court' attitude," Mr O'Brien said.

"I'm operating a business in a similar way that we've operated in for quite a long time, my intention is to continue to deliver to customers the value they seek."

He refuted the ACCC's concerns about their impact on fuel retailing, saying his analysis suggested "there has been no pronounced shift in volumes from the independents or other players in the market" over the past decade.

The quarterly results showed sales of $59.15 billion for the year to June 30, up 4.3 per cent, or 2.4 per cent after accounting for an extra week's trading.

Australian food and liquor accounted for $40 billion of the sales, up 4.7 per cent on a normalised basis. Liquor was particularly strong, up nearly 9 per cent.

Mr O'Brien described the sales growth as "solid", against "challenging retail conditions and an economic environment underpinned by consumer uncertainty and low growth in disposable income".

Average prices fell 2.9 per cent for the year, including 3.5 per cent in the June quarter.

Woolworths shares shed as much as 4 per cent before closing 55¢ down at $33.22.

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