Woolworths started as a bargain basement in a Sydney arcade and became Australia’s biggest supermarket chain. Here’s how it makes its money, one trolley at a time.
Woolworths Group is Australia’s largest supermarket company and one of the biggest employers in the country.
It opened in 1924 as Woolworths Stupendous Bargain Basement in the Imperial Arcade in Sydney, and became known as “the fresh food people”. It has no link to the former U.S. and British Woolworths chains. Its financial year ends in late June.
Supermarkets, thin margins
Australian Food, which includes Woolworths supermarkets and Metro convenience stores, is by far its biggest business, with sales of about $54 billion in the 2026 financial year.
Supermarkets make money on volume rather than big margins. For every $100 Woolworths sells in its Australian food business, it keeps only a few dollars as earnings before interest and tax. That’s why small changes in prices, costs, theft and wastage can make a big difference to its profits.
Woolworths also owns Woolworths New Zealand, formerly known as Countdown, and the discount department store Big W. It spun off its drinks and pubs business, Endeavour Group, which owns Dan Murphy’s and BWS, in 2021.
Online, data and advertising
Online shopping is a fast-growing part of the business, worth more than $10 billion of sales a year. Woolworths also runs the Everyday Rewards loyalty program.
The data from those shoppers helps power Cartology, its advertising business, which sells ads to food and grocery brands on its website, app and in stores. Advertising earns much higher margins than selling groceries.
Prices and the risks
Woolworths and Coles together sell most of Australia’s groceries, which brings close attention to their prices. A 2025 inquiry by the competition regulator, the ACCC, found the supermarket industry was concentrated and among the most profitable in the world, although it didn’t find price gouging. The ACCC has also taken both supermarkets to court over some of their discount claims.
The risks include price competition from Coles, Aldi and others, cost-of-living pressure on shoppers, rising wages and other costs, regulation, and the cost of fixing the underpayment of some staff.
Amanda Bardwell, who previously ran its online business, has been chief executive since September 2024.
Latest results, as at 9 November 2026
Full year to June 2026, reported 26 August 2026: sales rose 3.6 per cent to $71.5 billion, and profit before one-off items rose 15.4 per cent to $1.6 billion. Australian Food’s earnings rose 8.5 per cent, as Woolworths cut prices to win back shoppers, and Big W returned to profit. Woolworths set aside an extra $710 million to cover past underpayment of some salaried store team leaders, after a Federal Court ruling.
First quarter of the 2027 financial year, reported 28 October 2026: group sales rose 4.7 per cent to $19.4 billion, with Australian Food up 6.9 per cent and online sales up 16 per cent.
Next update: Woolworths reports its half-year results, to December 2026, in February 2027.
