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Woolworths has reported a lift in its December half profits, however inflationary pressures continue to loom over the business in the months ahead.

For the 27 weeks to January 1, sales reached $33.2 billion, up 4 per cent, while tax-paid profit grew 14 per cent to $907 million.

Group earnings before income and taxes achieved $1.6 billion, up 18.4 per cent while online sales fell 9.5 per cent as customers across all businesses returned to in-store shopping.

Across its Australian food division, sales increased 2.5 per cent to $24.4 billion driven by an increase in-store shopping while WooliesX sales (including e-commerce) fell 6.3 per cent to $2.5 billion.

Australian B2B sales improved by 23 per cent to $2.43 billion driven by then PFD division’s strong sales growth and market recovery in the half as well as an increase in supply chain provisions.

In New Zealand, sales grew marginally by 1.3 per cent to $4.1 billion, against elevated sales during the same period in the previous financial year.

Comparable sales improved by 0.3 per cent reflecting shelf price inflation during the half while e-commerce sales growth fell 0.5 per cent.

Big W sales increased 15.3 per cent to $2.7 billion “buoyed” by a strong performance in seasonal shopping including Halloween, Black Friday and Christmas in the second quarter.

Comparable sales increased 15.1 per cent during the half although online sales slumped 31.4 per cent.

Woolworths Group CEO, Brad Banducci, said sales momentum was solid in the half as the “operating rhythm” continues to improve.

“We are pleased to report a very balanced group result after an extended period of significant operational challenges and trading volatility.

“The economic environment is likely to become more challenging over the next six to 12 months as cost-of-living pressures persist and we continue to be focused on working hard on behalf of our customers to deliver value for money.”

For the first seven weeks of the second half, the business says operating conditions have continued to “stabilise” with robust sales growth.

Chilled-goods trucking company Scott’s Refrigerated Logistics has been placed in receivership, putting grocery supply channels at risk nationwide.

The company – which was bought by private equity firm Anchorage Capital Partners in June 2020 – supplies major super­markets including Coles, Woolworths, IGA and Aldi, as well as Foodbank Australia.

According to reports, the business was affected by a range of problems since the pandemic including domestic floods and a spike in fuel prices due to the war in Ukraine, which resulted in its collapse.

Scott’s secured creditors have appointed specialist insolvency firm KordaMentha as receivers to seek a “new long-term owner”.

“We anticipate a high level of interest in this business and its assets, given its significance in the cold chain supply system in Australia,” Scott Langdon, KordaMentha partner, told News.com.au.

For the time being, the company will continue to deliver to supermarkets until its future is clear.

The company operates 500 trucks and employs 1500 employees, with depots in all state capitals complemented by a dedicated pickup and delivery fleet.

An Aldi spokesperson said: “The supermarket supply chains rely on many interdependent partnerships, and despite the challenges presented with this news, we are working with our suppliers and logistics partners to minimise impact to customers.”

Coles customers are flocking to own-brand goods as prices rise and households feeling the pinch of rising interest rates are tightening their grocery budgets.

But relief is in sight, says Coles chief executive Steven Cain, with the pace of price rises at its supermarkets easing since the start of the year.

The supermarket giant revealed on Tuesday it had appointed the first female chief executive in its 109-year history, with the boss of its commercial and express division, Leah Weckert, to take the top job when Cain retires in May.

Weckert, who joined Coles in 2011, had been mooted for the role after being appointed chief executive, commercial and express, last April, making her responsible for business units including grocery, non-food, dairy, fresh produce and meat and deli, as well as Coles’ own brand, its food manufacturing facilities and Coles Express shops.

She said many exciting projects were on the horizon for the grocery giant, which is making major automation investments at its distribution centres along the east coast.

“I’m really looking forward to working with our 130,000 team members to deliver,” she said.

Presenting his last set of results on Tuesday, Cain said own-brand sales jumped 12 per cent in the December quarter and kept increasing. But the business was catering well for households under pressure as well as those who hadn’t yet changed spending habits but may in the coming months struggle after more rate rises.

He said trading conditions were showing the resilience of the supermarket business model.

“Supermarkets are a very resilient business,” he said. “For [some] consumers, they’re thinking hard about what they’re eating. They’re managing their waste, they’re cooking in bulk, and they’re moving out of proprietary brands into own brand.”

“At the other end of the scale, some people haven’t made changes. The changes they might make is to maybe not go to restaurants, they might choose to eat from the supermarkets.”

Cain said prices across the company’s supermarkets had increased to 7.7 per cent in the three months to December, up from 7.1 per cent in the September quarter. Packaged goods and dairy price rises drove that inflation, with more suppliers increasing costs.

But he flagged inflation was expected to cool later this year, with price growth starting to ease in this quarter.

“We expect headline inflation to moderate throughout the remainder of the [June] half, particularly in relation to anything from farms,” he said.

Revenue across Coles rose 3.9 per cent to $20.8 billion for the first half of the 2023 financial year, and profits jumped 11.6 per cent to $616 million.

Supermarkets revenue rose 4.6 per cent to $18.8 billion, though sales in its liquor business were down by 2.4 per cent to $1.9 billion compared with the previous half, which was heavily affected by people staying at home because of the pandemic.

Fresh food inflation moderated from 8.8 per cent in the first quarter to 7.1 per cent in the three months to December, as growing conditions improved for a range of produce.

MST Marquee analyst Craig Woolford said the company’s numbers showed an improvement in sales momentum and higher gross profit margins. “However, the timing of the departure of Steven Cain may influence the share price reaction,” he said.

Shares had declined by 1.6 per cent in early afternoon trade to sit at $18 just after 1.30pm.

Coles and Woolworths have teamed up to explore a recycling solution for RedCycle’s soft plastic stockpile after its collapse last November.

An investigation by Sydney Morning Herald revealed that the soft-plastic recycling scheme left millions of bags and soft-plastic items “secretly stockpiled” in warehouses for months without being recycled.

Although RedCycle hasn’t responded yet, the supermarkets have extended an offer to safely store the collected materials, in accordance with necessary safety requirements of relevant state environmental protection agencies (EPAs), until they are processed.

Brad Banducci, Woolworths Group CEO, said: “We were very disappointed to learn that RedCycle hasn’t been recycling the soft plastics they collected from our stores, and we are working to make it right.

“Coles and Woolworths have taken this step to provide reassurance to the public that the soft plastics they took the effort to deposit in RedCycle’s bins won’t be unnecessarily sent to landfill.”

Matt Swindells, Coles’ chief operations and sustainability officer said the retailer is “deeply disappointed by the unrecycled stockpiles” as collectively Coles and Woolworths have paid more than $20 million to RedCycle over the last decade to recycle plastics.

A multi-million dollar Soft Plastics Recycling Contribution Fund, provided by both Coles and Woolworths, will assist in the storage and management of the stockpiled material.

Australian Retailers Association CEO, Paul Zahra, commended the move and added: “The commitment by two of the country’s biggest grocery competitors for a worthy cause is a fantastic demonstration of leadership and the success that can be attained from collaboration around sustainability efforts.”

In a LinkedIn post, the CEO & founder of eco startup Single Use Ain’t Sexy, said the situation is a “further reminder of how important it is that we use less plastic in the first place and invest in the circular economy, rather than relying on recycling.”

Australian baby formula startup Sprout Organic has expanded internationally into Saudi Arabia and Malaysia.

Selasi Berdie, founder and CEO of Sprout Organic, said the company’s growth has been “phenomenal” and added: “With zero tariffs, high-income levels and high birth rates, Saudi is a gateway to penetrate the whole GCC region and opens several other opportunities including the UAE.”

According to market research company Euromonitor, Saudi Arabia is the fourth largest infant formula market in the world with a market size value of US$883 million, and Malaysia is in sixth place.

“With high birth rates and a population of over 30 million people, Malaysia has one of the highest forecast infant category growth rates at 9.34 per cent and suits our current stage of business prior to taking on larger Asian markets,” said Berdie.

The company is currently seeking private funding to facilitate further international expansion opportunities.

The brand’s infant formulas are certified organic and made with ingredients such as rice, peas and coconut. It is also free from allergens such as dairy, soy, eggs, wheat, fish and peanuts and sold in more than 1500 locations throughout Australia and New Zealand.

The boss of Penfolds owner Treasury Wine Estates will travel to China next month to reconnect with customers, local staff and business partners, as the $10 billion winemaker forges ahead with its strategy of deepening its presence in the US and other Asian markets.

Speaking to this masthead after announcing double-digit profit growth, Tim Ford said even if Beijing lifted its punitive trade sanctions on Australian exports today, it would still take the business several years to fully rebuild the volume of wine – 600,000 cases – it was once selling into the previously lucrative Chinese market.

“For our higher end luxury wines, it would take three years because we have to go and source more grapes,” Ford said.

“So if you make it this year, you don’t sell it for another three years. It would certainly take us time to increase the makes of those wines ... because we’ve done such a good job of reallocating what was going to China a couple of years ago.”

As other winemakers and Australian exporters keenly await further improvement in relationships between Canberra and Beijing, Ford said there were “plans and strategies in place” if restrictions were removed quickly, but insisted the company was sticking to business as usual.

Ford, who has not visited China due to years of border closures from the pandemic, revealed he would be travelling there next month.

“I intend to be in there in March,” he told this masthead. “Still finalising all my plans.”

Treasury Wine has spent the last two years rebuilding its business by growing its presence in other markets, particularly the US through a partnership with rapper Snoop Dogg and the acquisition of a Californian vineyard, and other Asian countries, finding success with India, Hong Kong, Singapore, and Thailand and more. It has also circumvented tariffs by growing grapes in China and launching a new line called One by Penfolds that sources grapes from China’s Ningxia province, Bordeaux and California.

Treasury Wine on Wednesday reported a 72 per cent jump in net profit to $188.2 million for the first half of the 2023 financial year as it successfully passed on price increases to consumers, many who kept reaching for luxury and premium wine over the festive season.

Net sales revenue for the December half was up 1.4 per cent to $1.28 billion, while earnings before interest and tax (EBIT) for the period rose 17.2 per cent. Net sales revenue per case rose by 13.5 per cent compared to the same period in 2021.

However, the numbers fell short of market expectations, sending Treasury Wine shares down 7 per cent to $13.34.

“We would expect modest downgrades (1-2 per cent) to 2023 financial year consensus forecasts,” wrote E&P Financial consumer research executive director Phillip Kimber in a note.

The company will pay a fully franked interim dividend of 18 cents per share.

Queensland-based XXXX brewery’s parent Lion has signed a Power Purchase Agreement (PPA) to procure 176 MW of renewable electricity from Woolooga Solar Farm.

The solar farm is located near Gympie in southeast Queensland and was established through a joint venture between oil conglomerate BP and UK solar company, Lightsource.

As a result, the brewery will now use 100 per cent renewable electricity at its Milton site. The company also wants to achieve a net-zero value chain by 2050.

Justin Merrell, Lion’s sustainability director, said the Milton site is a historic Brisbane landmark and this latest announcement proves the brewery is “capable of moving with the times”.

“All of our beer produced here – up to 250 million litres annually – is now made using 100 per cent renewable electricity.

“This agreement will stop around 138,000 tonnes of carbon emissions from entering the atmosphere. That’s the equivalent of taking 45,000 cars off the road.”

Prior to initiating the PPA with BP, about 25 per cent of the electricity used by Lion breweries was renewable.

The existing 2200 solar panels installed on the roof of Milton brewery will continue to contribute to XXXX’s sustainability targets.

Fable Food Co, an Australian food company that produces ‘meaty’ food made from mushrooms, has raised US$8.5 million in a Series A funding round.

Singapore-based global venture capital firm K3 Ventures is a leading investor alongside Greg Creed, former Global CEO of Yum! Brands (parent company of KFC, Pizza Hut, Taco Bell brands); Professor Peter Singer, Professor of Bioethics at Princeton University known for being one of the intellectual founders of the modern animal rights movement; and Frantz Braha and Adrien Desbaillets, the founders of Singapore based SaladStop!.

Existing investors Blackbird, AgFunder and Aera VC also participated in the round, along with vegan television personality and podcaster Osher Günsberg and his wife Audrey Griffen.

Fable launched in December 2019 and is renowned for having broken new ground in the meat alternative market with its mushroom-based meat products that are clean label, minimally processed and made with all-natural, plant-based ingredients.

The company previously had an A$6.5 million seed funding round in August 2021 and brought its meaty mushroom burger patty to market in partnership with Grill’d. It has since expanded its footprint in Australia following up with nationwide launches at Guzman y Gomez and The Coffee Club.

Last year saw Fable enter the UK market with burger chain Honest Burgers, meal delivery companies Gousto and Planty, and the UK’s first organic supermarket chain Planet Organic. The brand also launched into the United States with plant-based quick service restaurant chain Beatnic, New Zealand with Hell Pizza, and Singapore with SaladStop.

Fable also entered into new brand partnerships in North America, with the launch of its meaty pulled mushrooms into plant-based New York-based meal delivery service CookUnity, cult plant-based restaurant chain The Butcher’s Daughter, as well as Canadian cooked meal delivery service Ethey.

Fable will use the funding to accelerate research and development and the launch of new meaty mushroom products to market and accelerate the company’s growth and expansion in international markets and talent acquisition, with a focus on North America, the United Kingdom and Singapore.

“Thanks to the backing and support of K3 Ventures and all of our investors, we will be able to accelerate bringing our delicious, clean label, and sustainable meaty mushroom products to every market in the world,” Michael Fox, Co-founder and CEO of Fable, said.

“We want to inspire the world to make more sustainable food choices,” Fox added. “We believe that eating more delicious, meaty food made from mushrooms will help the world reduce global meat consumption – without compromising on taste, texture, or experience – and this is how we will be able to achieve a more sustainable food system.”

Infant formula maker A2 Milk’s marketing push in China has helped it post a double-digit jump in profit and allowed the company to ride out the harsh zero-COVID lockdowns imposed on its most lucrative market.

A2 on Monday posted a 22.1 per cent jump in net profits after tax to $68.5 million for the first half of fiscal 2023, with earnings for the period rising to $107.8 million.

Its results were largely driven by a 43.5 per cent growth in China label sales. However, the overall Chinese market shrank by 12.5 per cent during the half, due to declining birth rates in the country.

A2’s shareholders weren’t impressed sending the company’s share price down 8.6 per cent to $6.49 at the close of Monday’s session.

David Bortolussi, the chief executive of the infant formula maker, said while a range of marketing and distribution efforts had driven greater brand recognition of A2’s brand within China and lifted sales, the daigou (reseller) channel of its English-label business suffered 39.5 per cent because of China’s harsh zero-COVID lockdowns.

“No doubt [the lockdowns] had a significant impact,” Bortolussi told this masthead.

He also signalled a reassessment of the role played by the daigou channel – a network of shopping agents who buy things for residents on mainland China – in driving A2’s future growth.

The daigou channel was crippled at the onset of the pandemic, which cut off international travel and stopped resellers from bringing infant formula product in and out of the country. In August 2022, the dairy giant had signalled a renewed focus on building the channel back to its heyday, but the recent lockdowns have forced yet another rethink.

“It was starting to show signs of stabilisation, but it did decline,” Bortolussi said. The company has ramped up engagement with daigou resellers and has created a dedicated marketing team.

“We’re absolutely fully engaged in supporting [them] and it’s still an important channel for us. It’s just at a market level for the reasons we’ve discussed, there’s a lot of change and shift going on ... We’re considering ways that we can kind of change the model for them as well.”

China is the Auckland-headquartered company’s most important market, representing nearly half of A2’s total revenue. However, birth rates in China have been declining for several years, meaning the business will have to fight for a greater slice of a shrinking infant formula pie.

“It’s really a share game because there’s no volume growth in the market,” Bortolussi said. A2 Milk holds just 5 per cent of the China market.

“When you look at where we play in the market and how well we are positioned with that brand and execution, I think there is still significant opportunity for us to grow over time. But in essence, it’s a share game ... because the market is not growing.”

E&P Financial retail analyst Phillip Kimber said that A2 Milk’s business turnaround was “on track” after swinging back to profit late last year, but said investors expected more from the company.

“Given a strong share price and only modest consensus upgrades – we expect the share price to be flat (maybe down little) post the result,” he wrote in a note to clients.

McDonald’s McDelivery service has finally made it Down Under, six years after it was launched overseas.

But the fast-food giant’s latest initiative comes at a cost for consumers: According to news.com.au customers will pay $3.99 for delivery and a 5 per cent customer service fee for orders over $12. Orders under $12 will cost an extra $2.

Initially, this new delivery service is available only in selected NSW locations. Customers can order their meals for delivery on the MyMacca’s app where they can also earn and redeem loyalty points.

Delivery customers can also use the app to track the order’s progress.