Woolworths reported group sales growth of 4.7% and Australian Food segment sales growth of 6.9% for 1Q27. While these are strong results for a mature retailer, the growth rates are likely to fade from here. We expect comparable sales growth in Woolworths Food to ease back to 4.8% in 2Q27e and then hover near that level for the remainder of FY27e. While Food momentum is good, Big W and New Zealand are small detractors because the weak sales trends will limit their margin recovery.

Coles Group (scheduled 30 October 2026) and Woolworths (scheduled 28 October 2026) are due to release their 1Q27 sales results. We forecast 6.0% comp sales growth for Woolworths Food and 3.3% for Coles Supermarkets. The weighted average result is above trend and helped by improved execution at Woolworths and weaker sales for Aldi and independents. Superior sales momentum for Woolworths may last another quarter and then fade. Outside of supermarkets, it remains challenging, Coles Liquor is likely in decline and Big W will have near flat sales.

Woolworths has good sales momentum, which has led to a higher PE ratio. The chances of surprisingly strong sales momentum in Woolworths trading update is high given the success of the Ooshies collectables campaign. We may see sales growth of 7%+. However, such programs have no discernible ongoing benefit to sales. As a result, Woolworths sales trends are peaking and are likely to slow through FY27e.