Low-price department store Big W has recorded a 2.1 per cent fall in total sales for FY24 to $4.6 billion, contributing to a 90 per cent fall in operating profit.
Big W’s parent company Woolworths Group claimed the department store’s overall performance was materially impacted by a challenging trading environment during the year.
Normalised second half sales decreased by 3.6 per cent. Big W added that sales momentum improved through the fourth quarter boosted by e-commerce and a successful toy sale event leading to item and transaction growth.
Big W’s earnings before interest and tax (EBIT) was just $14 million, which declined by a normalised 90.3 per cent, with second-half EBIT down $40 million which also reflected increased autumn/winter clearance activity and higher stock loss.
Across Big W’s four trading segments, ‘everyday’ sales were broadly flat with growth in beauty care and bulk offerings in household cleaning offsetting slower sales in pet and baby.
Clothing and home were the most impacted categories, Woolworths Group reported, due to longer lead-times on product and range enhancements. Clothing was also affected by a slow start to autumn/winter and home sales by availability challenges caused by range changes.
However, item growth in both segments improved in the fourth quarter.
“Key transformation initiatives gained momentum during the year including the transition to group platforms for range and space management, promotional planning and smart clearance activity in H2,” Woolworths Group reported. “The full clothing range was also reset during the year with fewer styles, lower price points, more investment in all-year ranges and a focus on fit excellence, with new products available in store in Q1 FY25.
A new Big W store was also opened during the year in Stanhope Gardens in Sydney to trial a “more modern” store design.
Big W online gross merchandise value (GMV) increased by 6.4 per cent in FY24 with Big W Market sales of $44 million.
Traffic to the Big W website increased by 11.2 per cent, the group reported, supported by the third-party range expansion to around 100,000 items following the launch of Big W Market in November, leveraging the MyDeal technology platform.
Meanwhile, The retailer’s tech platform Big W X reported e-commerce sales of $486 million, which were broadly in line with the prior year with e-commerce penetration increasing by 28 basis points to 10.3 per cent.
Big W app usage also continued to grow with active app users reaching 278,000 in the fourth quarter.
The Everyday Rewards loyalty program’s scan rates increased to 58 per cent in the fourth quarter due to growth in active members driven by partnering on key events.
Woolworths Group CEO Brad Banducci said the overall financial challenges at Big W were most particular in the second half.
“While the BIG W Play and Everyday segments held up reasonably well, Home and Clothing sales declined with increased promotional and clearance activity,” he confirmed. “Sales trends improved over the course of Q4 due to lower prices through price investment and a focus on opening price points, a strong Toy Sale and improved Clothing sales late in June due to colder weather.
“We expect continued momentum in our transformation in F25 as we continue to simplifyour ranges, enhance the customer experience and improve eCom services (including marketplace).”