Woolworths Group sales rose 1.8 per cent in the first quarter to $16.36 billion, but turnover in its retail food business fell on both sides of the Tasman.

Across its Australian food division, sales during the 14 weeks to October 2 fell 0.5 per cent to $12.2 billion while comparable sales declined 1.1 per cent. In Woolworths Retail (both stores and e-commerce), sales fell 0.6 per cent impacted by a decline in items as well as supply chain challenges.

Australian B2B sales increased by 26 per cent to $1.19 billion driven by a 36.1 per cent increase in B2B Food.

In New Zealand, sales declined by 2.5 per cent to $2 billion while comparable sales declined by 3.3 per cent. The retailer says customers put “fewer items” in their baskets with comparable items per basket declining by 14.3 per cent. E-commerce sales growth and penetration continued to increase by 5.9 per cent in the quarter.

Big W sales increased 30.1 per cent to $1.19 billion driven by customers returning in-store. All categories performed strongly with a shift back towards everyday and home and apparel products. Online sales dipped 51.8 per cent to $112 million.

Due to inflation, average prices across its Australian Food business increased by 7.3 per cent and 5.3 per cent in New Zealand.

Brad Banducci, CEO of Woolworths Group, said customer shopping behaviour and the trading environment continued to normalise during the quarter.

“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,” he said.

“Ongoing supply chain volatility and the possibility of another wet summer will be key challenges to navigate but we are seeing strong early sell-through of seasonal lines and we remain cautiously optimistic for the period ahead.”