The nation’s largest retailer Woolworths has issued a profit warning, claiming that cost of living pressures is hurting the under siege retail group with their discount retail operation Big W struggling to grow sales both in store and online.

Overall Big W sales fell around 1% to $1.12 billion in the quarter while Big W online sales declined 5.4% to $104 million in Q1 F25.

As for profits the Woolworths group is reporting a potential slide with Big W profits believed to be down “Significantly” according to sources.

Comparable sales growth was down (0.7)%, comparable transactions growth was up 3.4%.

The number of items in the basket were up 0.9% compared to the previous year.

Items grew by 4.4% on the prior year, as new seasonal ranges offering more value resonated with customers.

Management claim that this growth was offset by lower average selling prices due to a shift in mix towards lower priced items as part of the range renewals as well as some price reductions.

Comparable sales decreased by (0.7) %.

Across BIG W’s four trading segments, Everyday sales increased on the prior year, with a strong promotional plan in Beauty.

Play sales were below the prior year due to a decline in the gaming market and a focus on fewer, more profitable promotions.

In Home, the new Spring/ Summer range resonated with customers, driving comparable sales growth and strong unit growth.

The business that has become an online marketplace destination for brands who want access to their customer base saw their marketplace eCommerce business grow by 32.1% to $141 million with penetration of 12.2%.

The only problem with this model is that Big W is receiving less in profits, as marketplace participants are wearing the cost of shipping and returns.

At the end of Q1, the Big W network comprised 178 stores with store numbers unchanged on Q4 F24.

Group management have taken to not reporting profits at quarterly updates with new CEO Amanda Bardwell who is having to clean up a massive mess left behind by her predecessor, warning that Group earnings before interest and tax for the six months ended December 31 are likely to come in between $1.48 billion and $1.53 billion, which at the midpoint is about 5.6 per cent below last year’s $1.6 billion result, and about 6 per cent below market consensus.